A Multitude of Breakouts
We are currently experiencing a multitude of technical breakouts in the precious metals industry.
I can't recall a time when I've seen so many historical moves in this space.
Here are my 6 favorite chart setups.
1) Gold and silver miners to gold ratio
2) Junior miners to gold ratio also breaking out from a 14-year downward trend.
3) The GDX ETF, or the most liquid gold mining stocks ETF, also poked its head out of a 14-year resistance.
4) The GDXJ ETF, which comprises smaller junior companies, is forming a very bullish trend with now 3-months above this long resistance.
5) Silver, which has likely been the most frustrating asset for investors over the past decades, has finally broken out.
6) The gold-to-silver ratio also finally broke down from a 13-year support.
If this marks the beginning of a bull market in gold, silver is likely to lead to the upside.
While this thesis doesn’t rely on technical analysis, it’s always important when your macro and fundamental thesis aligns with price behavior.
Investors are far too pessimistic about this industry.
I have never seen so many people confidently claim that mining stocks will never track gold prices and that this industry is structurally broken.
This is one of the most unfounded historical perspectives I have experienced in my career.
Have a great weekend.
-- Tavi Costa
I talk about Web3
1moThe transition is near.
Marketing Director at NORTH
2moInsightful! Z
Leading for better Future
2moThank you for these great charts. I don't know how many miners are in the index used for the miners to gold ratio. And how much of their performance is based on gold. And whether they performed due to mining more metals or due to better efficiency in their business or due to higher prices for the metals. Anyway, gold is rising, and the ratio too, a bit. The index must perform as good as gold to keep the ratio's level. And that seems to happen. Therefore, for me it feels like an impulse measure, saying that investors start to believe into the economic value of the miners. The plateau shows that the miners keep up with the rising gold and silver price. This ratio just needs to keep its level to show miners are participating from rising gold prices. Anyway, personaly I would buy miners only when anticipating new and more efficient mining technology.
Financial Analyst | Financial Modeling, Due Diligence, Valuation Analysis
2moGreat work! Thank you.