Gold’s failed breakout is testing investor resolve.
But let’s consider last week’s action before unearthing our bullion.
Check out the failed breakout with a bearish momentum divergence in the lower pane:
Waning momentum and failed breakouts go hand in hand. Gold futures proved an excellent example of momentum diverging from price, one of the reasons we track RSI readings.
But just because momentum confirmed the failed breakout doesn’t mean we should turn bearish gold and precious metals.
Remember, gold posted a new all-time high last week. New all-time highs are bullish in my book, no matter how you slice them.
Plus, the March breakout remains valid, and the underlying uptrend is intact:
It doesn’t matter whether we’re talking about markets or summer vacations – I always avoid the crowds and aim to beat the heat.
No lines. No traffic. No fake, overpriced food.
It also means dropping those hot semiconductor names and reaching for silver mining stocks…
July is by far the best month of the year for gold’s crazy cousin. And it’s not even close:
Unsurprisingly, silver futures gained roughly seven percent last week. They also eclipsed the previous month's high and printed their highest weekly close since January 2013 – a stellar way to start the month.
On the flip side, June takes the cake as Silver’s most challenging month of the year.
And what did Silver do last month?
It only fell by three percent, finding support at a critical shelf of former highs:
Perhaps they’re giving back some recent gains today, but most stocks are.
More importantly, Monday marked the largest one-day rate-of-change for our Coal Index since 2020…
If you’re wondering why we created an index of coal stocks, the answer is simple: The December 2020 delisting of the VanEck Vectors Coal ETF $KOL forced our hand.
They shut down the only coal ETF just as commodities began ripping (many toward new all-time highs). You can’t make this stuff up…
One of our favorite names – Alpha Metallurgical Resources $AMR – has gained over 4,000% off the December 2020 lows. Unbelievable!
Almost four years later, the rally isn’t over for these names.
Our coal index is on the verge of kicking off the next leg higher:
Yields on sovereign debt are chopping sideways across the globe.
The US, France, Germany, Spain, and UK benchmark rates are well below their respective 2023 peaks.
But in Japan, the JGB 10-year yield is hitting its highest level in over a decade.
Check out the Japan benchmark rate cruising above 100 basis points:
Earlier in the week, the Japan 10-year yield reached 1.10 for the first time since July 2011.
While the Bank of Canada, the Swiss National Bank, and the European Central Bank began cutting rates this year, the Bank of Japan (BoJ) may hike later this month.
You can blame it on a plummeting yen or the BoJ’s Yield Curve Control policies.
