Because gold-mining earnings amplify gold price trends, gold stocks are effectively leveraged plays on gold. So their price levels relative to gold’s are a great valuation proxy.
Although the gold's correction has been mild, because it's gone on for so long, sentiment has become bearish. When gold is done consolidating, it will break out above all-time highs.
When the market is under the 18-day average of closes, I have a natural bearish bias. There is little to hold up the gold market right now. The dollar is strong.
As I look at the gold market, the trend is down. You're staying under the 18-day average, therefore the bias is down. The market fell to the lower Bollinger Band.
If we see the market break through resistance of 4360-4401SPX, that's a strong signal that the low is in place, and a rally to 4800SPX has likely begun.
According to an RBC report titled “You Could Hear a Pin Drop,” the gold mining industry’s largest conference was hosted by the Denver Gold Group in Colorado Springs.
