Below you see the ratio GDX to GLD (gold). The chart shows that the gold miners are now at the lowest level in the past 10 years compared to gold. This tells me that the miners are so cheap and hated and out of favor that many can be bought as perpetual warrants. The key to the whole gold picture may be when this ratio turns up and crosses above its red 200-day moving average. In the meantime, we wait and patiently watch. At this point, I’m wondering whether the ratio that you see on the chart is in the process of building a bottom.
Below is a 10-year chart of Newmont Mining. The stock hit an important low in 2009. Newmont appears to be consolidating above its 2009 low. Here again, I’m watching to see whether Newmont can reverse itself and break out above its consolidation formation.
On an entirely different subject, I ... Log in or subscribe to continue reading.