The rebound in and gold mining stocks has been weak.
Gold hasn’t even hit $1800 yet, and the VanEck Vectors Gold Miners ETF (NYSE:) and VanEck Vectors Junior Gold Miners ETF (NYSE:) each sputtered at the first sign of resistance. In addition, their weekly closes have been weak, and they failed to hold most of April’s gains into May.
Monday’s pop aside, there has not been much to be excited about.
From a technical standpoint, Tuesday’s downside reversal reinforces that the oversold rebound in the gold stocks could be over.
The weekly chart below shows GDX has struggled at $36, and GDXJ has struggled at $50.
My chart of leading indicators for the sector reveals the underlying weakness in the sector.
GDX and GDXJ Weekly Chart
Sure, gold stocks have outperformed Gold, but their other metrics have been weak.
Even as Gold rallied over $100/oz, the GDX advance-decline line sits at the March low. GDX has outperformed the only slightly, while Gold made a new low relative...read more...