"Skeptical" Gold Can Break $1,300; What Does This Mean For Miners? - Analyst
(Kitco News) - Despite renewed enthusiasm in the gold market, with prices nearly reaching $1,300 this week, one analyst says he is not yet convinced, especially given weakness in related markets.
"I am skeptical that gold can break $1,300 on this try as the performance from silver and gold stocks recently has not confirmed the strength in gold," Jordan Roy-Byrne, editor of The Daily Gold, told Kitco News in an email response Thursday.
And, until gold breaches that level, the recent rally seen in the miners, especially over the last month, is not entirely convincing either, the newsletter writer added.
Gold bulls have yet to push prices above that key resistance level this year, but prices are still up 11% year-to-date. The VanEck Vectors Gold Miners ETF (GDX) is mirroring gold, up 10.9% over the same time period. Meanwhile, VanEck's Junior Gold Miners ETF (GDXJ) is lagging behind, up just 6% this year.
"The technical setup is if gold could break $1,350-$1,375, then it would be in position for a strong move to $1,550. On the way, $1,300 is the strongest and most important resistance," Roy-Byrne said.
"If gold could establish $1,300 as a floor, the miners (GDX, GDXJ) would be poised for very strong performance over the ensuing 12-18 months."
After hitting seven-month highs mid-week, gold prices have cooled off, settling the day down more than 1% at $1,279.50 an ounce.
By Sarah BenaliFor Kitco News
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sbenali@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities,securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |