The War In The Gold And Mining Share Markets Is Heating Up

The War In The Gold And Mining Share Markets Is Heating Up

With the gold and silver markets rallying after yesterday’s Fed rate hike, today King World News is pleased to present an important update on the war in the gold market from Michael Oliver at MSA. Oliver allowed KWN exclusively to share this key report with our global audience. 

The “Mini-Panic” In The Gold Market
By Michael Oliver, MSA (Momentum Structural Analysis)
March 16 (King World News) – 
The charts on left begin thirty-six months after the ETF emerged.  At that point we can begin to calculate a 36-mo. avg. and build an annual momentum chart.

In fact, the high for GDXJ was $179.44 in December 2010, several quarters before gold actually peaked.

kwn-oliver-i-3162017

Its behavior from the lows of the June 2013 crash low (circled) through late 2015 was the same momentum behavior produced by GDX and gold.  Flat and massive basing action, not otherwise evident when looking at the continually decaying price chart.  Breakout was easy to define (though MSA was focused on gold and GDX at the time).  In February 2016 momentum blew the upper end out of the base (arrow), and a switch was flipped.  GDXJ’s price at the point of breakout was $21.35.  Measured from there, the post-breakout surge was a 146% advance…

The key structure for momentum was the level noted by the wide red horizontal (about -40%).  While in its December 2016 pullback gold corrected down to that same annual structure (the top end of a prior momentum base), GDX and GDXJ did not.  GDXJ seems to want to establish a support floor around the zero line/36-mo. avg.  It dropped below it in December, but closed above it by month’s end, and again this month has pulled back to near the 36-mo. avg. and rebounded.  If we see momentum readings subsequently rise above the February oscillator high (short horizontal), then MSA will suggest that the 36-mo. avg./zero line is an important level going forward—to maintain future monthly closes above.  For now it’s premature to call that a developed momentum structure, but it looks like that’s what GDXJ wants to do.

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Interviews with market experts from around the world with a focus on precious metals.