Evidence shows gold stocks have bottomed...

May 4, 2015 11:08 AM

Even though the US$ index has stalled out, the gold price against foreign currencies is 20 percent above its December 2013 low. That helps miners operating outside of the US with some costs denominated in local currencies. 

Other factors to consider include the strength in the two largest gold miners Newmont and Barrick and the fact that gold stocks recently were potentially the cheapest in history.

The gold miners can continue to show relative strength but they may not rip to the upside until gold cooperates. A weekly close below $1150/oz could accelerate gold’s final breakdown. On the other hand, a weekly close above $1220 would be bullish.

I would actually prefer the former as it would give us real clarity to the end of the bear market and it would give us a final chance to buy miners before they explode to the upside.

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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.