From the Desk of Ian Culley @IanCulley

Gold is running into supply.

Whether the former 2011 highs still hold any psychological significance doesn’t matter.

Gold bulls continue to find an overwhelming amount of sellers at that level. This will remain the case until demand absorbs supply.

How long will that take? It’s anyone’s guess – maybe weeks, perhaps even months or quarters.

The point is, gold needs time.

Meanwhile, silver futures are coiling within a tight range…

Check out the daily chart of gold’s crazy cousin:

It's the weekly Gold Rush!

As gold futures approach a significant area of overhead supply, we cover the most important charts in the space.

Check it out...

From the Desk of Ian Culley @IanCulley

The NYSE might be closed today, but futures markets are open.

And while the volume remains low during US trading hours, it hasn’t stopped Gold futures from revisiting a critical level.

Gold currently challenges a price level engrained in goldbugs’ minds worldwide…

The prior commodity supercycle peak!

Check out the chart of Gold futures:

Yesterday we talked about how early the Phlx Gold & Silver Index was in this cycle.

This index of 30 precious metal mining companies was the first of the Gold related stock indexes to break out. This was about a month after Gold Futures confirmed a buy signal for us in early October.

But of the "stock" related indexes, we look to the Phlx Gold & Silver Index as a leader. It certainly acts like one.

And do you know how I know it's not a downtrend?

Look at its components. Each column represents a different moving average ranging from the 5-day all the way to the 250-day. The further to the right the column sits, the longer the smoothing mechanism we used.

Green cells represent when the price of the stocks are above that particular moving average, and each of the 30 stocks are listed on the left side of the table:

In the 4th quarter we saw the Phlx Gold & Silver Index ($XAU) break out above its key level, invalidating any bearish thesis that one could possibly have for Precious Metals.

You see all that resistance in the $XAU in 2013 and 2016, right around $110-113?

Well once we got back above that in November, it was time to start buying Gold & Silver stocks.

But where was the most popular ETF $GDX?

It was still below that overhead supply, as you can see in this chart below.

Until now...

From the Desk of Ian Culley @IanCulley

Have you noticed precious metals printing fresh highs?

Last week, gold posted new multi-month highs. So did silver and platinum, hitting their highest levels since the spring of 2022.

Not a bad start to 2023 for these shiny rocks. And it gets better!

Gold broke out to new all-time highs relative to bonds last week. The yellow metal is not only showing strength on an absolute basis – it’s also outperforming its alternatives.

These are classic bull market characteristics and two critical pieces of evidence suggesting gold is in the early stages of a new structural uptrend.

If gold is on its way to new all-time highs, gold mining stocks will be participating. 

And it just so happens they are…

If gold prices rise, companies that remove gold from the ground and sell it will surely benefit. Simple!