Precious metals bulls have plenty to be excited about.
Major headwinds have abated as rallies cool in real yields and the dollar.
Gold futures are trading above their former commodity supercycle peak.
And the yellow metal is printing new all-time highs priced in every significant currency except the US dollar.
Even mining stock stocks are breaking out!
Check out Alamos Gold $AGI ripping to a new five-month high:
AGI has been on my radar since January. It provided an excellent trade during the spring.
Now, Alamos is flashing another buy signal, reclaiming a critical shelf of former highs outlined last month.
I like AGI long toward 20 provided it’s trading above 13.
AGI isn’t the only mining stock rewarding buyers right now. It’s just one of the strongest – buy the strongest, sell the weakest.
We’ve also discussed Sandstorm Gold $SAND and Kincross Gold $KGC. Both trades are shaping up well.
SAND is holding above our risk level, while KGC hit a new 52-week high last Friday (I still need to see a decisive close above 5.75 before buying KGC).
Bigger picture: Gold and the broader mining space haven’t broken out yet!
Here’s the Gold Miners ETF $GDX:
GDX is carving out a multi-month base below the critical 30 level. It’s constructive.
Yet momentum holds within a bearish regime, signaling sellers remain in control.
Plus, it hasn’t broken out yet!
I will continue to buy the strongest mining names as price action trumps my opinions.
But a few pockets of impressive relative and absolute strength among individual miners pale compared to a decisive upside resolution in GDX.
AGI isn’t running it back to twenty without broad participation from the mining space, evidenced by GDX trading above thirty.
Headwinds have abated for precious metals. But it’s only been a few days.
In fact, I’m not sold on a weaker dollar quite yet (more on this in tomorrow’s Currency Report).
Yes, gold is printing new all-time highs in every currency that matters except the dollar. It’s bullish, no doubt. I believe gold will ultimately resolve higher priced in USD.
But that doesn’t mean gold will break out next week or next quarter. It’s also crucial to understand that we’re in the early stages of the next leg higher for these metals.
Overhead supply is keeping buyers in check for now. And we must tread lightly as long as sellers keep a lid on these rocks and their related stocks.
Nevertheless, price comes first.
And I have to give precious metals the benefit of the doubt if gold trades above its prior commodity supercycle peak.
