Attractiveness of Gold Project Strengthened
Source: Clive Maund
May 23, 2023 (Investorideas.com Newswire) Technical analyst Clive Maund takes a look at the 6-month GDX chart to tell you where he believes the precious metals sector is heading.
Thursday, we saw a clear breakdown by GDX from a Double Top as expected and predicted in the update of the 11th PM SECTOR INTERMEDIATE CORRECTION GETS UNDERWAY - TARGETS while, again, as predicted in the last Gold Market update, the dollar rallied quite strongly out of its Double Bottom which is, of course, the reason for the weakness in the PM sector.
With regard to the PM sector, there is now nothing to do but wait. We know that the sector will put in a stellar performance once the dollar crashes and burns, which is now "baked in" and only a matter of time, but first, we must wait out this corrective phase.
Depending on whether the broad market holds up, which it may, given the degree of Fed meddling in the market, GDX looks like it will drop to the vicinity of its rising 200-day moving average, probably settling a little above it.
So that is the area where we will be looking to add to positions or make fresh purchases. On the flip side, if it doesn't drop that far before it turns up, we will be watching to see if it can succeed in breaking above the support that just failed at the lower boundary of the Double Top as a first sign that things are improving again.
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