With the U.S. Dollar Index trading near the 96 level and investors unsure where gold and silver are headed from here, today King World News shares a fascinating piece which features two key illustrations about what is really happening with the price of gold.
July 2 (King World News) – Gold – Can’t Garner Strength – Gold Spot price (GOLDS-1,175.55, see Figure 31) is unchanged from last month and the same parameters apply: Support at the 1,138 low from 2014; downtrend provides resistance at 1,271. A move through either determines the next direction. Weekly and monthly momentum models are flat … indecisive.
Don’t count on Gold stocks (see Figure 32). The Market Vectors Gold Miners ETF (GDX) ratio to Gold (a rising line favors the stocks; a falling line favors Gold) remains in the multi-year downtrend we have cited regularly and does not yet offer any evidence of reward. The downtrend would have to be penetrated. Our contention is that the various Gold ETFs have replaced the need to take risks in the stocks, that carry environmental, nationalist and revenue issues that the pure Gold ETFs do not.
Thus, even as Gold retains a bear market profile, the stocks are even underperforming Gold.
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