DiscoverGold
2 days ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | July 20, 2024
• Following futures positions of non-commercials are as of July 16, 2024.
Gold: Currently net long 285k, up 30.2k.
As expected, gold bugs staged a breakout this week but were unable to hang on to it. On Tuesday, gold broke out to a new intraday high of $2,475. The momentum continued Wednesday with another intraday high of $2,488 but only to then reverse lower. By Friday, the metal had given back 0.9 percent for the week to $2,399/ounce.
Prior to the breakout, gold essentially went sideways for three months. On April 12th, it hit a new intraday high of $2,449 before selling off a tad. This was eclipsed on May 20th, as the yellow metal ticked $2,454 before once again coming under pressure. All along, bids showed up at $2,300, a breach of which will have shifted momentum to the bears.
Even now, this week’s action probably does not boost bulls’ confidence. A test of the 50-day at $2,369 probably lies ahead; if this is lost, $2,300 is a must-save for the bulls.
Non-commercials have been aggressively accumulating net longs in gold futures, and it does not take long for them to begin unwinding those.
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DiscoverGold
3 days ago
Gold Stocks to Overshoot
By: Adam Hamilton | July 19, 2024
The gold miners’ stocks have blasted higher to a powerful upside breakout this month. Amplifying gold’s underlying surge, they’ve achieved major new bull-market highs. Yet despite that big rallying, gold stocks remain undervalued relative to the metal they mine that drives their earnings. They still need to mean revert much higher to reflect prevailing gold prices, with momentum buying fueling a proportional overshoot.
Markets are forever cyclical, flowing and ebbing in endless marches of uplegs and corrections within bulls and bears. Price action is pendulum-like, oscillating between opposing extremes. Those include high and low technicals, overvalued and undervalued fundamentals, and greedy and fearful sentiment. Long-term averages reflect the bottom midpoints of pendulum arcs, mean-reversion targets for stretched prices.
But pendulums pulled way to either side don’t stop in the middle once they start swinging back. Their kinetic momentum carries them well through their midpoints in proportional overshoots to the other side. Markets dragged to either extreme function similarly, not just normalizing to averages but swinging right through to opposing extremes. Gold-stock cycles are no exception, and they recently saw an extreme anomaly.
Gold-mining profits are overwhelmingly driven by prevailing gold prices, as mining costs only change gradually. This is readily evident in the major gold miners included in the benchmark GDX gold-stock ETF. Their last-reported quarterly results were Q1’24’s, where the top 25 GDX gold miners averaged $1,277 all-in sustaining costs. Subtracting those from gold’s average price yields a great sector earnings proxy.
In Q1 gold averaged $2,072, so GDX-top-25 profits ran $795 per ounce. A year earlier in the comparable Q1’23, gold was $1,892 while it cost these elite majors $1,302 to produce. That made for unit earnings of $589 per ounce. So during a year where average gold prices rallied a nice 9.5%, the GDX-top-25 majors’ profits surged 34.9%. This latest real-world example clocked in at excellent 3.7x upside leverage to gold!
Stock prices ultimately reflect some reasonable multiple of underlying earnings, and gold price trends fuel the great majority of gold miners’ profits. Thus gold stocks have always acted like leveraged plays on the metal they mine. After painstakingly analyzing the GDX top 25’s latest results for 32 consecutive quarters now, I can sure tell you that takes a ton of work! But an easy proxy decently reflects this key fundamental link.
It’s simply the ratio between gold-stock and gold price levels. Charted over time, this shows whether gold stocks are overvalued or undervalued relative to the metal driving their earnings. For many years I’ve been using the GDX/GLD ratio or GGR variant of this metric. It divides that leading gold-stock ETF’s daily closes by those of the mighty American GLD gold ETF, the largest physical-bullion-backed one in the world.
The GGR’s positioning relative to recent-year averages is analogous to gold stocks’ valuation pendulum. That was recently pulled to an exceedingly-anomalous extreme, with the mean reversion now well underway. Odds highly favor that momentum buying fueling a proportional overshoot, arguing much more gold-stock gains are coming. In this chart the GDX/GLD ratio in blue is superimposed over the raw GDX in red.
Flagging market extremes is important for trading since they mark major cyclical reversals, the tops of pendulums’ arcs. The more-extreme any extreme, the greater the likelihood it will spawn a proportional mean reversion and overshoot. An astounding one happened in late February, when GDX plunged to just $25.79. That was actually marginally under early October’s $25.91 when gold’s latest upleg was born.
Over a 4.8-month span where gold had powered 11.7% higher in a strong upleg, the leading gold-stock ETF somehow slipped 0.5% lower! That was insane, as I pointed out to our newsletter subscribers at the time. Normally major gold stocks amplify material gold moves by 2x to 3x, thus GDX should’ve been up 23% to 35%! So our newsletters added a bunch of cheap gold-stock trades in February as this anomaly worsened.
On February 28th at that inexplicable GDX nadir, the GDX/GLD ratio collapsed to just 0.137x! Though an extreme 4.0-year secular low, that understates how anomalous this was. The GGR had only been slightly lower at 0.133x on one single day in the dark heart of March 2020’s pandemic-lockdown stock panic! The market fear then was off the charts, as the flagship S&P 500 index plummeted 33.9% in just over one month!
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DiscoverGold
3 days ago
The Move in Gold Stocks is Just Starting
By: Jordan Roy-Byrne | July 19, 2024
Gold stocks are entering a sweet spot.
In recent months, we have written about how gold stocks outperform Gold after breakouts in the Gold price. This has transpired since March.
However, in the past two weeks, the miners began to lead Gold, although Gold had yet to break out of its consolidation.
The sweet spot occurs after the first move in Gold and into the second move.
In other words, Gold led the move from $2100 to $2400; now, miners can lead the move from $2400 to $3000.
Here is the evidence.
The GDX advance-decline line, a breadth indicator and often a leading indicator, made a new 52-week high two weeks ago. That was before GDX and Gold made new highs.
It was the first time the GDX advance decline made a new 52-week high in four years and only the third time in a similar context in the last 13 years.
In recent days, both GDX and GDXJ to Gold broke to new highs and made higher highs before Gold!
The GDXJ to Gold ratio closed Tuesday at a 14-month high, and the GDX to Gold ratio closed Tuesday at an 11-month high.
Furthermore, the GDXJ to GDX ratio has transitioned from a bearish trend to a bullish trend.
These indicators signal that the miners are leading Gold and that the larger juniors (GDXJ) are outperforming the seniors (GDX).
How well did the gold stocks perform during similar breakouts in the Gold price?
Following the 2005 breakout, GDXJ gained another 195% over the next two years and two months.
Following the 1972 breakout, the Barron’s Gold Mining Index surged 320% over the next two years and three months.
The epic breakout of the gold stocks in late 1964 (a proxy for Gold at the time) carried another 290% over the next three years and eight months.
If we have a recession, then it’s probable we get similar gains over the next few years.
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DiscoverGold
3 days ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | July 20, 2024
NY Gold Futures closed today at 23991 and is trading up about 15% for the year from last year's settlement of 20718. This price action here in July is reflecting that this is within the scope of a bearish reactionary move on the monthly level thus far. As we stand right now, this market has made a new high exceeding the previous month's high reaching thus far 24884 intraday and is still trading above that high of 24067.
Up to now, we still have only a 1 month reaction decline from the high established during May. We must exceed the 3 month mark in order to imply that a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. We have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Focusing on our perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23961 and overhead resistance forming above at 24232. The market is trading closer to the support level at this time.
On the weekly level, the last important high was established the week of July 15th at 24884, which was up 6 weeks from the low made back during the week of June 3rd. So far, this week is trading within last week's range of 24884 to 23957. Nevertheless, the market is still trading downward more toward support than resistance. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture. This market has made a new historical high this past week reaching 24884. Here the market is trading weak gravitating more toward support than resistance. We have technical support lying at 24260 which we are currently trading below implying the market is very weak. This infers that this level will now be resistance. Our Major Channel Support lies at 23341 and a break of that level would be a bearish indication for this market.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend. Looking at this from a wider perspective, this market has been trading up for the past 3 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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DiscoverGold
1 week ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | July 13, 2024
• Following futures positions of non-commercials are as of July 9, 2024.
Gold: Currently net long 254.8k, up 13.2k.
Gold is itching to break out. This week, it rose one percent to $2,421/ounce.
The metal has essentially gone sideways the past three months. On April 12th, gold hit a new intraday high of $2,449 before selling off a tad. On May 20th, a new high was created as the yellow metal ticked $2,454. All along, bids showed up at $2,300.
Amidst this, non-commercials are the most net long gold futures since March 2022.
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DiscoverGold
1 week ago
Gold Stocks Breaking Out
By: Adam Hamilton | July 12, 2024
The gold miners’ stocks are surging again, breaking out from recent months’ consolidation. This strong mid-summer price action is confirming their interrupted upleg is still growing. It should have a long way to run yet, with gold stocks still quite undervalued relative to gold. With gold’s fundamentals remaining very bullish and its miners soon reporting their best quarterly results on record, this breakout should accelerate.
From late February to mid-May, the leading GDX gold-stock ETF and benchmark had a good run surging 44.5%! That amplified gold’s parallel remarkable breakout surge by 2.3x in that span. On May 20th as gold hit its own latest record high of $2,424, GDX closed at $37.26. While gold had blasted up to risky extremely-overbought levels, the major gold stocks had not. I wrote a whole essay analyzing that in early May.
Back then I concluded “...gold’s pullback doesn’t need to suck in gold stocks this time around. While gold soared to extremely-overbought levels recently requiring a rebalancing selloff, gold stocks sure didn’t. ... Gold stocks were merely moderately overbought at their metal’s recent interim high, with little greed or euphoria evident. Indeed during the couple weeks since, gold stocks have largely defied gold’s pullback.”
“Rallying through most of it, they are consolidating high even at worst. This outperformance should continue as long as gold’s selloff stays orderly and avoids correction territory. Gold’s pullback maturing will be a great mid-upleg buying opportunity for gold miners...” My contrarian take on gold stocks ten weeks ago proved correct. GDX largely drifted sideways, only suffering a modest selloff by sector standards.
From mid-May to early June, gold’s overall sentiment-rebalancing pullback merely extended to 5.7%. In roughly that same span, GDX only retreated 11.0% for 1.9x downside leverage. Normally major gold stocks amplify material gold moves by 2x to 3x, with downside drops sometimes exceeding the upper end of that range. The gold miners have proven quite resilient, with GDX just slumping to $33.15 on June 13th.
Those sector lows held for the next couple weeks during the heart of gold’s summer-doldrums seasonal lull. That gold-stock drift could’ve easily persisted into early July, which is peak vacation time for traders. Yet gold miners surged anyway, with GDX blasting a dramatic 9.2% higher month-to-date as of midweek! That leveraged gold’s underlying move by a huge 4.5x, revealing rapidly-improving gold-stock sentiment.
My work may have played a tiny role in that impressive shift. On June’s final trading day, I published a popular essay called “Gold Miners’ Record Quarter”. It analyzed why their upcoming Q2 results will show the fattest gold-mining profits ever witnessed! Despite heading into a big holiday week, I was surprised to get unusually-large positive feedback and questions on that from professional investors and fund managers.
Some weren’t aware how fantastically-bullish gold miners’ fundamentals are. And interestingly all the sector buying in early July came before Q2 earnings season. The gold miners report quarterlies from three to six weeks after quarter-ends, so late July to mid-August. Odds are these upcoming epic results will still surprise the large majority of traders. Record earnings ought to stoke accelerated gold-stock buying.
Back to gold stocks breaking out, again GDX last crested at $37.26 in mid-May. On the Wednesday-close data cutoff for this essay, GDX challenged that hitting $37.05. Then Thursday morning before I started writing this essay, the latest CPI inflation data came in cooler than expected sparking a US-dollar slide and gold rally. GDX surged again on that, running as high as $37.99 midday Thursday as I pen this.
This draft will be finished before Thursday’s close, but a decisive breakout happens when a past high is exceeded by 1%. That works out to $37.63 on GDX. So by the time you read this, that key upleg-is-alive-and-well threshold has probably already been exceeded on close. All this is making for quickly-improving summer-doldrums trading action, as this indexed chart of gold stocks’ gold-bull-year summers reveals.
Here all the market summers from 2001 to 2012 and 2016 to 2024 are indexed to Mays’ final closes. The red line is the gold-bull-year seasonal average up to 2023, and the dark-blue line is this year’s gold-stock performance. This chart uses the older HUI gold-stock index, which closely tracks GDX as they include the same major-gold-miner components. Gold stocks’ summer-doldrums seasonal low tends to hit mid-June.
Entering summer 2024 from overbought levels, gold stocks fell more than usual in early June. By its mid-month nadir of $33.15, GDX was down 6.1% month-to-date. But that was still well within gold stocks’ usual summer-doldrums trading range of +/-10% from May’s final close. Gold stocks mostly ground along near those lows for most of the rest of last month, regaining little ground. Then they caught a bid in late June.
Recent weeks’ recovery surge has been strong, catapulting gold stocks back over their average levels this time of year. As of Wednesday, HUI and GDX performance ranked as the 6th best at this point in July out of all 21 of these modern gold-bull years! And if midday Thursday’s 298.78 HUI levels hold into the close, gold stocks would be up 7.0% summer-to-date. Their July performance has been outstanding...
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DiscoverGold
1 week ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | July 13, 2024
NY Gold Futures closed today at 24207 and is trading up about 16% for the year from last year's settlement of 20718. This price action here in July is reflecting that this is within the scope of a bearish reactionary move on the monthly level thus far. As we stand right now, this market has made a new high exceeding the previous month's high reaching thus far 24304 intraday and is still trading above that high of 24067.
Up to now, we still have only a 1 month reaction decline from the high established during May. We must exceed the 3 month mark in order to imply that a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. We have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains in a bullish position at this time with the underlying support beginning at 24015.
On the weekly level, the last important high was established the week of July 8th at 24304, which was up 5 weeks from the low made back during the week of June 3rd. So far, this week is trading within last week's range of 24304 to 23560. Nevertheless, the market is still trading upward more toward resistance than support. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture. The broader perspective, this current rally into the week of July 8th reaching 24304 has exceeded the previous high of 23826 made back during the week of June 17th.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend. Looking at this from a wider perspective, this market has been trading up for the past 2 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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DiscoverGold
2 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 6, 2024
The NY Gold Futures has been in an uptrend for the past 3 days closing above the previous session's high by 0.97%. The broader rally has unfolded over the past 20 days. Currently, the market is trading in a neutral position on our indicators but it is trading strongly higher up some 2.81% from the previous session low. Our projected target for closing resistance for the next session stands at 24262, we need to close above that target to imply a further advance. Failure to even exceed this intraday warns that the upward momentum is starting to decline. Moreover, a lower opening and a penetration of today's low of 23560 with a closing beneath this level would suggest today's high will stand temporarily.
Our Stochastics are all still pointing upward while our internal momentum models have also remained in a bullish posture.
Up to now, we still have only a 1 month reaction decline from the high established during May. We must exceed the 3 month mark in order to imply that a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Clearly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains in a bullish position at this time with the underlying support beginning at 23737.
On the weekly level, the last important high was established the week of May 20th at 24542, which was up 14 weeks from the low made back during the week of February 12th. We have been generally trading up for the past 4 weeks from the low of the week of June 3rd, which has been a move of 4.222%. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture. The broader perspective, this current rally into the week of May 20th has exceeded the previous high of 24488 made back during the week of April 8th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 9 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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trunkmonk
2 weeks ago
weirdo wooly on SI thinks DOW going way above 45k, either he is clueless, or he knows it wont happen until it drops at least 30% from here. the Hindenberg Omen, and about half dozen other indicators, says it over, and of course DOW and other indices can go higher from here, but HO is flawless, much better than his archaic indicators.
Trillions going into gold, from markets that only a retail fool would get into, cause they are the ones propping it up, while smart money moves out.
DiscoverGold
3 weeks ago
Bull of the Day: Barrick Gold (GOLD)
By: Zacks Investment Research | July 3, 2024
Zacks Rank #1 (Strong Buy) stock Barrick Gold (GOLD) isa Canadian gold mining company. Barrick is among the top gold producers globally, and the company has mining projects and exploration locations across five continents. GOLD management is focused on maximizing the benefits of rising metal prices by meeting operations and financial targets. As you might expect, the stock is highly correlated to its underlying commodity, gold. As such, I will first cover the bullish thesis behind gold.
Gold Bull Thesis
Inflation Hedge
Investors see gold as a hedge against inflation. The U.S. faces a mindboggling deficit of $34 trillion and is proliferating each day. As the 2024 election approaches, investors must accept the fact that Biden and Trump, the two overwhelming frontrunners, are not known for their fiscal conservatism. Furthermore, even if spending tapers, the Federal Reserve is expected to cut interest rates by year-end, and the budget deficit will remain at nosebleed levels. Interest payments are swelling, ranking fourth in spending (only behind Social Security, Medicare, & Defense). In other words, don’t expect a budget surplus any time soon – the last surplus for the federal government was in 2001!
U.S. Sanctions & BRICS Demand
BRICS is an acronym for an association of five major emerging national economies- which stands for Brazil, Russia, India, China, and South Africa (Egypt, Ethiopia, Iran, & the UAE have been added to the original BRICS recently) – known for their significant influence on regional and global affairs. BRICS was formed to promote cooperation and collaboration among its member countries, which are major emerging economies, to address common challenges, foster economic development, and enhance their collective influence on the global stage. By working together, BRICS seeks to strengthen their positions in international institutions, promote inclusive development, and contribute to global economic governance reforms.
How does the BRICS impact the price of gold? The U.S. has levied severe sanctions on BRICS members such as Russia and newcomer Iran. With Russia locked in a multi-year conflict with Ukraine (with no end in sight) and Iranian leadership funding proxy wars on U.S. troops globally, the two countries are essentially barred from using the U.S. dollar and are forced to seek alternatives. To “de-dollarize” and provide an alternative to the U.S. dollar (which is no longer backed by gold), the BRICS countries have been dramatically increasing their purchases of gold on the international market – a trend that should last for years to come and put a floor under gold and gold proxies like the Van Eck Gold Miners ETF (GDX).
Costco Sparks Retail Gold Demand
Costco Wholesale ((COST Quick QuoteCOST - Free Report) ) is one of the top discount retailers in the United States and worldwide. What makes Costco so unique? The company offers dirt cheap prices to those consumers who are willing to purchase a Costco membership and buy in bulk. By moving a lot of products, COST can keep prices low on everything from gasoline to televisions to furniture. Though COST is a discount retailer, it offers high-end products to its loyal customer base, such as expensive and difficult-to-source cognac, for example.
In the second half of 2023, Costco began to offer gold bullion bars at competitive price levels. The addition of gold bars to Costco Wholesale locations has been breathtaking. Because of its solid reputation and competitive pricing, COST reportedly rakes in ~$200 million a month in revenue from gold bullion alone. With such success, it is not out of the question that other retailers follow suit and the consumer gold market snowballs, driving gold prices higher.
Barrick Bull Thesis
M&A Sparks Growth
Barrick has been leveraging mergers and acquisitions to become an industry leading gold company. The company now owns five of the industry’s top ten tier one gold assets. Furthermore, GOLD has the lowest total cash cost position among senior gold peers mixed with high-quality gold reserves. Barrick also has an extensive regional presence across many of the world’s most prolific gold districts.
Robust EPS Estimates and the Tendency to Beat the Street
Zacks Consensus Estimates suggest that Barrick will grow EPS at a healthy double-digit rate over the next two years.
Image Source: Zacks Investment Research
Meanwhile, the company has delivered positive EPS surprises for four straight quarters, with an average surprise of 18%.
Image Source: Zacks Investment Research
Bullish Technical Set-Up
GOLD is forming a bullish monthly pennant. Investors should look for the stock to clear last month’s doji (indecision) candle.
Image Source: TradingView
Bottom Line
Through its aggressive M&A strategy, Barrick Gold is well-positioned to take advantage of soaring gold demand and government spending.
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DiscoverGold
3 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | June 29, 2024
• Following futures positions of non-commercials are as of June 25, 2024.
Gold: Currently net long 246.2k, up 3.1k.
Once again, $2,300 drew bids, with Wednesday touching $2,305 intraday. By the end of the week, gold was up 0.4 percent for the week to $2,340/ounce.
Gold bugs have defended $2,300 for just over two months now. The metal came under pressure after recording a fresh high of $2,449 on April 12th. On May 20th, a new high of $2,454 was hit. Soon after, sellers appeared, but they have not been able to push the metal under $2,300.
From the bulls’ perspective, they have successfully held $2,300, but have been unable to use it as a launching pad for a new rally. The 50-day ($2,352) is beginning to roll over, with gold closing under the average in 14 out of the last 15 sessions.
Gold has come a long way since last October when it ticked $1,824 (was $1,996 this February) and cannot afford to lose $2,300.
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DiscoverGold
3 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 29, 2024
This market made a new high today after the past 2 trading days. The market opened higher and closed higher. The immediate trading pattern in this market has exceeded the previous session's high intraday reaching 23506. Therefore, this market has rallied over the past 15 trading sessions and there is a potential to move up for another 2 daysNevertheless, this market remains well above all seven of our intial support levels. Nonetheless, the market remains neutral on our system indicators.
This market has not closed above the previous cyclical high of 24067. Obviously, it is pushing against this resistance level.
Up to now, we still have only a 1 month reaction decline from the high established during May. We must exceed the 3 month mark in order to imply that a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
The perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23373 and overhead resistance forming above at 23497. The market is trading closer to the support level at this time. An opening below this level in the next session will imply a decline is unfolding.
On the weekly level, the last important low was established the week of June 3rd at 23042, which was down 2 weeks from the high made back during the week of May 20th. We have seen the market drop sharply for the past week penetrating the previous week's low and yet it recovered to close above the previous week's close of 23312. We are still trading neutral on the Weekly Momentum Indicators and this is a warning that initial support has been breached. This strongly implies we should pay close attention now to the Weekly Bearish Reversals. If we begin to elect Weekly Bearish Reversals, then we are dealing with a more sustainable near-term correction. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture.
Looking at this from a broader perspective, this last rally into the week of June 17th reaching 23826 failed to exceed the previous high of 24542 made back during the week of May 20th. That rally amounted to only four weeks. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 23042. Additional support is to be found at 23263. Looking at this from a wider perspective, this market has been trading up for the past 3 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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4 weeks ago
3 Gold Stocks to Watch Ahead of Inflation Data
By: Schaeffer's Investment Research | June 26, 2024
• The PCE index for June could influence interest rates and gold prices
• The PCE price index is due out later this week
The Personal Consumption Expenditures Price Index (PCE) -- also known as the Federal Reserve's preferred inflation gauge -- for June is due out later this week. Investors will be eyeing the data for insight into the central bank's timeline of interest rate decisions, with many still hoping for at least one rate cut this year. Some officials are hesitant, however, as inflation remains high.
Given the impact of interest rates on gold prices, which are already near record highs, now is a great time to check in with three key industry players: Barrick Gold Corp (NYSE:GOLD), Royal Gold Inc (NASDAQ:RGLD), and Newmont Corporation (NYSE:NEM).
GOLD is up 0.6% to trade at $16.70 at last check, after bouncing off long-term support at the $16 level. The security isn't too far off from its April 12, 52-week high of $18.94, despite recent pressure at the $17 region. In the past nine months, the stock added 14.2%.
Last seen up 1.6% to trade at $125.10, RGLD is today testing a resistance at its 20-day moving average, which has been in place since late May. The $120 level contained the stock's pullback from its May 21 52-week high of $134.56, after providing a floor back in March and April. Shares amassed a 11.1% lead in the last 12 months, but are close to breakeven in 2024.
NEM is down 1.2% to trade at $41.40 at last check. The security has been trading above the 20-day moving average -- which is ready to contain today's losses -- since late March, after gapping to a Feb. 28, roughly six-year low of $29.43. NEM is flat for the year and in the last 12 months.
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1 month ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 22, 2024
NY Gold Futures closed today at 23312 and is trading up about 12% for the year from last year's settlement of 20718. Currently, this market has been rising for 7 months going into June suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Distinctly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
From a perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23351 and support forming below at 23202. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of May 20th at 24542, which was up 14 weeks from the low made back during the week of February 12th. We have been generally trading up for the past 2 weeks from the low of the week of June 3rd, which has been a move of 3.402%. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture. Immediately, this decline from the last high established the week of May 20th has been important Before, this recent rally exceeded the previous high of 24488 made back during the week of April 8th. That high was likewise part of a bullish trend making higher highs over the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action. Looking at this from a wider perspective, this market has been trading up for the past 7 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 18 months since the low established back in November 2022.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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1 month ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | June 15, 2024
• Following futures positions of non-commercials are as of June 11, 2024.
Gold: Currently net long 233.9k, down 3.4k.
Last Friday, after hugging the average for 10 consecutive sessions, gold sliced through the 50-day. This week, it remained under the average in all five sessions, with attempts to reclaim in on Wednesday unsuccessful. That said, the metal ($2,349/ounce) is not that far away from the average at $2,358, and there is room to rally on the daily. For this, defense of $2,300 is a must for gold bugs. Else, the weekly can take over.
Gold has come a long way since last October when it ticked $1,824 (was $1,996 this February). It came under pressure after it set a new high of $2,454 on May 20th.
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1 month ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 15, 2024
NY Gold Futures closed today at 23491 and is trading up about 13% for the year from last year's settlement of 20718. Immediately, this market has been rising for 7 months going into June suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Clearly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Focusing on our perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23373 and overhead resistance forming above at 23542. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of May 20th at 24542, which was up 14 weeks from the low made back during the week of February 12th. We have been generally trading up for the past week from the low of the week of June 3rd, which has been a move of 2.369%. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture. Immediately, this decline from the last high established the week of May 20th has been important Before, this recent rally exceeded the previous high of 24488 made back during the week of April 8th. That high was likewise part of a bullish trend making higher highs over the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 23263. Additional support is to be found at 23006. Looking at this from a wider perspective, this market has been trading up for the past 6 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 18 months since the low established back in November 2022.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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1 month ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | June 8, 2024
• Following futures positions of non-commercials are as of June 4, 2024.
Gold: Currently net long 237.3k, up 717.
After essentially hugging the 50-day for 10 consecutive sessions, gold sliced through the average on Friday. For the week, it declined 0.9 percent to $2,325/ounce. A loss of $2,300 – which seems imminent in the sessions ahead – will open the door toward horizontal support at $2,240s.
Earlier, gold printed a fresh high of $2,454 on May 20th before going the other way. The metal has come a long way. Last October, it ticked $1,824 and was at $1,996 this February. It is healthy to digest these gains by unwinding the overbought condition gold is in – the weekly in particular.
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1 month ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 8, 2024
NY Gold Futures closed today at 23250 and is trading up about 12% for the year from last year's settlement of 20718. Presently, this market has been rising for 7 months going into June suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
From a perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23351 and support forming below at 22943. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of May 20th at 24542, which was up 14 weeks from the low made back during the week of February 12th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed beneath that low which was 23338. This was a very bearish technical indicator warning that we have a shift in the immediate trend. We are trading below the Weekly Momentum Indicators warning that the decline is very significant and we need to pay attention to the timing and reversals. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture. Immediately, this decline from the last high established the week of May 20th has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 24488 made back during the week of April 8th. That high was likewise part of a bullish trend making higher highs over the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 5 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 18 months since the low established back in November 2022.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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2 months ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | June 1, 2024
• Following futures positions of non-commercials are as of May 28, 2024.
Gold: Currently net long 236.6k, up 6.8k.
Gold was up 0.5 percent for the week but could have done better. At Tuesday’s high, gold rallied as high as $2,386 but finished the week at $2,346/ounce. The metal has essentially gone sideways the last six sessions just above the 50-day ($2,335).
It increasingly feels like gold is taking a breather before beginning a process of digesting the recent gains. Last October, the yellow metal ticked $1,824 and was at $1,996 this February. On May 20th, gold reached $2,454.
Once the 50-day gives way, there is decent support at $2,240s.
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2 months ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 1, 2024
NY Gold Futures closed today at 23458 and is trading up about 13% for the year from last year's settlement of 20718. Up to now, this market has been rising for 7 months going into June suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. We have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains neutral with resistance standing at 23490 and support forming below at 23405. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of May 20th at 24542, which was up 14 weeks from the low made back during the week of February 12th. Afterwards, the market bounced for 14 weeks reaching a high during the week of May 20th at 23263. Since that high, we have been generally trading down to sideways for the past week, which has been a sharp move of 4.905% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 19964 as it has fallen back reaching only 23338 which still remains 16.90% above the former low.
When we look deeply into the underlying tone of this immediate market, The broader perspective, this current rally into the week of May 20th has exceeded the previous high of 24488 made back during the week of April 8th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 23006. Additional support is to be found at 23046. Looking at this from a wider perspective, this market has been trading up for the past 5 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 18 months since the low established back in November 2022.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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2 months ago
Gold Stocks Catching Up
By: Adam Hamilton | May 31, 2024
After getting off to a slow start in this upleg, gold miners’ stocks are beginning to catch up with their metal. Gold stocks lagged dreadfully early on, but are increasingly outperforming in gold’s remarkable breakout surge of recent months. These mounting gold-stock gains are boosting bullish sentiment, attracting in more traders accelerating the upside. This virtuous circle of capital inflows still has a long way to run.
If gold stocks can’t leverage gold’s gains, they aren’t worth owning. While miners have high potential to soar with their metal, they bear big additional risks. Those include all kinds of operational, geological, regulatory, and geopolitical challenges and problems. And they are all heaped on top of the biggest risk of all, gold price trends! Yet that’s the only risk in gold bullion, so miners’ stocks really need to outperform.
If they don’t, speculators and investors are much better off sticking to gold itself. Historically the leading GDX gold-stock ETF has amplified material gold moves by 2x to 3x. This range’s lower end is probably the minimum acceptable to compensate traders for gold stocks’ big additional risks. And the upper end is where this high-flying sector can quickly multiply wealth. Unfortunately much of gold’s latest upleg saw neither.
This mighty upleg was born in early October at a deep low near $1,820. Gold V-bounced sharply out of that anomalous nadir on heavy gold-futures short-covering buying. By early December gold had already surged 13.8% to $2,071, its first record close in fully 3.3 years! Yet despite the growing excitement and bullishness that generated, GDX’s parallel early-upleg gains merely ran 22.8% making for weak 1.7x leverage.
After hitting a second marginally-higher record in late December, gold rolled over into a pullback. That really proved mild, with gold slumping just 4.2% at worst into mid-February. Yet confidence remained so darned low in gold stocks that GDX collapsed 19.1% on that, for horrendous 4.6x downside leverage! Then even though gold soon rebounded 2.1% by late February, GDX ground another 0.4% lower to $25.79.
Shockingly that was marginally under early October’s $25.91 when this upleg was born! Gold’s young upleg remained strong then, still up 11.7%. But the major gold stocks of GDX somehow still edged down 0.5% in that entire span. This sector was a total disaster, not only not leveraging gold but completely ignoring a strong upleg! That miserable anomaly was murder on sentiment, leaving bearishness running rampant.
I wrote an essay on gold stocks languishing that very week, concluding then “These seriously-oversold gold stocks riddled with capitulatory bearishness is an anomaly that will prove short-lived. They are due to soon mean revert sharply higher with gold. ... gold’s bull advance will soon resume on big gold-futures long buying. Incredibly all that fueling gold’s young upleg has been reversed, fully reloading spec-long buying.”
I continued, “After similar past excessively-bearish longs, mean-reversion buying has catapulted gold about 12% higher in roughly six weeks. The battered gold stocks will fly as that drives gold deep into record territory.” I caught a lot of flak for that hardcore contrarian essay, which used this same chart. At that time, GDX was way down at its latest deep low labeled here “Crazily Retreats to Pre-Gold-Upleg Lows”.
With gold stocks at absurd lows relative to gold then, we were aggressively adding cheap trades to fill up our newsletter trading books. All that was a great call, as what happened since proved. We didn’t have to wait long either. As March dawned, a top Fed official gave a speech hinting at monetizing more US Treasuries. That indeed triggered epic gold-futures long buying, and gold was quickly off to the races again.
Speculators’ gold-futures holdings are only published weekly in the famous Commitments of Traders reports. In the CoT week alone straddling that Fed surprise, gold rocketed a monster 4.9% higher! The specs bought an astounding 55.0k long contracts, the fourth highest on record out of all 1,314 CoT weeks since early 1999 then! GDX blasted up 10.2% during that CoT week, returning to normal 2.1x leverage...
* * *
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2 months ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | May 25, 2024
• Following futures positions of non-commercials are as of May 21, 2024.
Gold: Currently net long 229.8k, up 25.3k.
Non-commercials raised net longs in gold futures to the highest since April 2022. They were probably lured into the trade by the metal’s recent strength. This month, gold rallied from $2,285 on the 3rd to $2,454 on the 20th, with the latter a fresh record, surpassing the recent all-time high of $2,449 posted on April 12th.
However, gold bugs were unable to latch on to the 20th (this Monday) high. By the end of the week, the yellow metal gave back 3.4 percent to $2,335/ounce.
More weakness probably lies ahead, particularly if the bulls are unable to defend the 50-day moving average at $2,319. There is decent support at $2,240s.
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2 months ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | May 25, 2024
Next Monday is Memorial Day, which is a holiday in the United States. NY Gold Futures closed today at 23345 and is trading up about 12% for the year from last year's settlement of 20718. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. Presently, this market has been rising for 6 months going into May suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low. As we stand right now, this market has made a new high exceeding the previous month's high reaching thus far 24542 while it has not broken last month's low so far of 22491. Nevertheless, this market is still trading above last month's close of 23029.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. We have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23387 and support forming below at 23182. The market is trading closer to the resistance level at this time.
On the weekly level, the last important low was established the week of April 29th at 22852, which was down 3 weeks from the high made back during the week of April 8th. So far, this week is trading within last week's range of 24542 to 23263. Nevertheless, the market is still trading downward more toward support than resistance. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, The broader perspective, this current rally into the week of May 20th reaching 24542 has exceeded the previous high of 24488 made back during the week of April 8th. That high was likewise part of a bullish trend making higher highs over the week of January 29th. We have seen a rally thus far from the last low of 22852 for the past 3 weeks. Only a break of that low would signal a technical reversal of fortune, however, the market remains strong at this time. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 22852. Resistance is to be found starting at 23402. Looking at this from a wider perspective, this market has been trading up for the past 3 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 17 months since the low established back in November 2022.
Critical support still underlies this market at 20030 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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2 months ago
Gold Mid-Tiers’ Q1’24 Fundamentals
By: Adam Hamilton | May 24, 2024
The mid-tier and junior gold miners in this sector’s sweet spot for upside potential recently wrapped up their latest earnings season. These fundamentally-superior smaller gold producers delivered big last quarter, reporting spectacular results. The potent combination of record gold prices, lower mining costs, and better production fueled some of their richest profits ever. Yet mid-tiers still remain way undervalued.
The leading mid-tier-gold-stock benchmark is the GDXJ VanEck Junior Gold Miners ETF. With $5.5b in net assets mid-week, it remains the second-largest gold-stock ETF after its big brother GDX. That is dominated by far-larger major gold miners, though there is much overlap between these ETFs’ holdings. Still misleadingly named, GDXJ is overwhelmingly a mid-tier gold-stock ETF with juniors having little weighting.
Gold-stock tiers are defined by miners’ annual production rates in ounces of gold. Small juniors have little sub-300k outputs, medium mid-tiers run 300k to 1,000k, large majors yield over 1,000k, and huge super-majors operate at vast scales exceeding 2,000k. Translated into quarterly terms, these thresholds shake out under 75k, 75k to 250k, 250k+, and 500k+. Today only one of GDXJ’s 25 biggest holdings is a true junior!
Its Q1 production is highlighted in blue in the table below. Juniors not only mine less than 75k ounces per quarter, but their gold output generates over half their quarterly revenues. That excludes streaming and royalty companies that purchase future gold output for big upfront payments used to finance mine-builds, and primary silver miners producing byproduct gold. But mid-tiers often make better investments than juniors.
These gold miners dominating GDXJ offer a unique mix of sizable diversified production, excellent output-growth potential, and smaller market capitalizations ideal for outsized gains. Mid-tiers are less risky than juniors, while amplifying gold uplegs much more than majors. Our newsletter trading books are now filled with fundamentally-superior mid-tiers and juniors, smaller gold miners which we’ve long specialized in at Zeal.
Mid-tier gold-stock outperformance accelerates as major gold uplegs mature, increasingly attracting more traders to bid up stock prices. That’s finally starting to happen again as gold-stock sentiment shifts back to bullish. Gold’s driving upleg has powered 33.2% higher at best since early October. The major gold stocks represented by GDX hit a new +44.5% highwater mark midweek, for meager 1.3x upside leverage to gold.
Historically major gold stocks tend to amplify material gold moves by 2x to 3x, with that upside leverage mounting later in uplegs. That process is underway, as since mid-February GDX’s gains have outpaced gold’s by 2.0x. The mid-tiers of GDXJ lagged their larger peers for much of this upleg, as traders hadn’t started warming to this sector. But GDXJ’s total upleg gains grew to 52.3% this week, pulling ahead of GDX.
This smaller-gold-stock outperformance should continue expanding on balance. Fundamentally-superior mid-tiers’ gains during major gold uplegs surge way ahead of the majors’, sometimes even doubling them! The longer gold and gold stocks rally, the more bullish speculators and investors wax on them, the more capital they deploy to chase those gains, the more mid-tiers’ stock prices accelerate way ahead of larger miners’.
For 32 quarters in a row now, I’ve painstakingly analyzed the latest operational and financial results from GDXJ’s 25-largest component stocks. Mostly mid-tiers, they now account for 66.0% of this ETF’s total weighting. While digging through quarterlies is a ton of work, understanding smaller gold miners’ latest fundamentals really cuts through the obscuring sentiment fogs shrouding this sector. This research is essential.
This table summarizes the GDXJ top 25’s operational and financial highlights during Q1’24. These gold miners’ stock symbols aren’t all US listings, and are preceded by their rankings changes within GDXJ over this past year. The shuffling in their ETF weightings reflects shifting market caps, which reveal both outperformers and underperformers since Q1’23. Those symbols are followed by their recent GDXJ weightings.
Next comes these gold miners’ Q1’24 production in ounces, along with their year-over-year changes from the comparable Q1’23. Output is the lifeblood of this industry, with investors generally prizing production growth above everything else. After are the costs of wresting that gold from the bowels of the earth in per-ounce terms, both cash costs and all-in sustaining costs. The latter help illuminate miners’ profitability.
That’s followed by a bunch of hard accounting data reported to securities regulators, quarterly revenues, earnings, operating cash flows, and resulting cash treasuries. Blank data fields mean companies hadn’t disclosed that particular data as of the middle of this week. The annual changes aren’t included if they would be misleading, like comparing negative numbers or data shifting from positive to negative or vice-versa.
The mid-tier gold miners’ overall Q1’24 performance again proved spectacular! These sweet-spot-for-upside smaller gold stocks slashed mining costs while boosting their production. Those strong operations combined with record prevailing gold prices fueled another massive per-ounce earnings jump, the fourth consecutive quarter of those! Last quarter was among the best mid-tiers ever reported, impressively bullish.
Production growth trumps everything else as the primary mission for gold miners. Higher outputs boost operating cash flows which help fund mine expansions, builds, and purchases, fueling virtuous circles of growth. Mining more gold also boosts profitability, lowering unit costs by spreading big fixed operational expenses across more ounces. But for the first time in eight quarters, the GDXJ top 25’s output shrunk!
They collectively mined 3,692k ounces of gold in Q1’24, which slipped 0.8% YoY. But that is due solely to composition changes among these elite ranks. Four stocks surged dramatically over this past year to enter the GDXJ top 25, displacing four other stocks. Among the ascenders is Aya Gold & Silver, a small silver miner that produces no gold. That elbowed Lundin Gold to 26th place, which mined 112k ounces in Q1.
Replacing a producer with a non-producer skewed overall output lower. Had LUG been included instead of AYA, the GDXJ top 25’s aggregate output last quarter would’ve climbed 2.2% YoY to 3,803k ounces! That’s pretty impressive, much better than the GDX-top-25 majors’ 0.6%-YoY shrinkage I analyzed in an essay on their latest results last week. But both these elite mid-tiers’ and majors’ production is still lagging.
Every quarter the World Gold Council publishes fantastic Gold Demand Trends reports, containing the best-available global gold supply-and-demand data. The recent Q1’24 edition revealed total worldwide mine production grew 4.4% YoY. The GDXJ top 25 would’ve even bested that if not for output shortfalls in just two of its larger producers, B2Gold and Endeavour Mining. But those were both expected last quarter.
BTG suffered a permitting delay for a sizable new gold project in Mali, so it has guided 2024 to midpoint production around 900k ounces. That would make for full-year shrinkage of 15.2%. But with that project and another new mine coming online in 2025, next year is already forecast to see production surge 21.1% to a record 1,090k-ounce midpoint. So this year is a temporary lull for B2Gold before growth resumes.
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