Gold Miners Waiting On This Chart

It’s not a chart of nominal HUI with upside technical targets. We’ll do that in NFTRH this weekend, along with the usual individual miners. Rather, it’s a companion to other charts we’ve been reviewing over the last several months showing the undervaluation of the gold stock sector relative to gold’s performance vs. cyclical assets/markets. For example, gold has risen strongly vs. the CRB index and that is a sector fundamental undervaluation.

gold crb ratio

But on the macro picture, do you think that maybe gold stocks would benefit if gold manages to turn up vs. the US stock market? This chart appears to hold the key. HUI has been in a beautiful correlation to Gold/SPX since the 2011 top. To this point, the ratio has not turned up but you can see why I harp so much on the need for Au/SPX to get in gear. If it does, and joins Au/CRB and others, hang on to your hats and prepare for some upside targeting beyond the bounces of the last few years. We’d then go from identifying value mode to acquiring targets mode.

hui

[edit] For a little perspective, here is the GLD/SPY ratio (daily chart) nearly an hour after Thursday’s open. It appears to be breaking upward from a bull flag and a hold of the SMA 200. If it holds up it could be an initial hint about the above scenario unfolding.

gld spy ratio

Check out my previous gold post and make sure you check back to see my next post!

Best,
Gary Tanashian
Biiwii.com

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One thought on “Gold Miners Waiting On This Chart

  1. Gold (Last Close $ 1399.310)

    Short term and Mid term charts shows Upward trend, However, still Long term trend is required to be confirm reliable Bull Run, and accordingly, Gold must sustain and trade above $ 1470 and $ 1560, with at list for three constant closings.

    If not found so, Gold may touch its previous lower range of on or around $ 1200 and sub $ 1200 is also quit possible probability.

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