Higher Low In Place For Gold Stocks As 2013 Beckons

Higher Low In Place For Gold Stocks As 2013 Beckons

With all of the volatility of the past nine months, few market observers would think the gold equities have begun a series of higher lows or even a new bull market. However, this action is typical of this sector. GDX first formed a low in May followed by a double bottom low in July. From that point, GDX gained 35% in only two months! After three months and a pullback of 20%, the gold stocks are pushing higher once again and have a chance at a tremendous 2013.

There are two extremely important levels for 2013. The first is GDX 48 or HUI 460. The chart below shows $48 as the most important near-term pivot point. GDX has already made a series of higher lows but a weekly close above $48 would add stronger momentum and confirmation to the uptrend. Also note the positive divergences in the GDX vs. Gold ratio and the RSI indicator.

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