Gold miners have become a war zone.
Has anyone noticed gold price went up but gold miners went down? What’s going on?
At its recent worst GDX fell from a top of $31 to $25, a drop of $6 or 20%. Basically GDX is fighting to breakthrough a major long term downtrend line which started in 2011. If it can breakthrough this, it will clear the sky to resume its upward path.
Looking at the Senior Gold Miners GDX ETF:
(a) There is a major downtrend line that started in 2012 from the last all time high. Refer to the Zoom Out chart
(b) GDX has been hitting this downtrend line and briefly broke above it. But now fallen below it. Refer to Zoom In chart, Point 2.
(c) GDX is now testing the 200 week moving average (ie. the average of the last 3 years +!). Refer to Zoom In chart, Point 3.
(d) It is still possible to fall further to say $24 or $21. Refer to Zoom In chart, Point
4. Good news is investors are secretly buying the dips and accumulating. This is shown by the rising trendline on the OnBalanceVolume indicator. Refer to the bottom of the Zoom Out chart.