Evidence shows gold stocks have bottomed...

May 4, 2015 11:08 AM

As we penn this article gold is trading below $1180/oz and set to close at its lowest level in six weeks. Gold is less than 2 percent from its weekly low of $1158. It is fairly close to another technical breakdown.

However, the gold mining stocks appear to be bucking the trend and showing increasing relative strength. It appears likely that the stocks have bottomed relative to the metal and maybe so in nominal terms.

Below we plot various gold miner indices against gold. We essentially plot the juniors and large caps from both the US and Canada against gold.

Not only have these ratios increased in recent months but they have increased in the past few weeks as gold has declined from $1220 down below $1180. That is a very important signal of relative strength.

may1edminersvgold

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About the Author

Jordan Roy-Byrne, CMT, is the editor and publisher of The Daily Gold. He can be contacted at Jordan@TheDailyGold.com.