MARKET VECTORS GOLD MINERS ETF CLEARS SUMMER HIGH -- A LOT OF GOLD MINERS HIT 52-WEEK HIGHS -- TWO RECENT BREAKOUTS INCLUDE BARRICK AND NEWMONT -- SILVER BREAKOUT BOOSTS SILVER SHARES -- SILVER WHEATON IS GROUP LEADER
GDX HITS NEARS 2011 HIGH... Chart 1 shows the Market Vectors Gold Miners Index (GDX) surging 4% yesterday through its July high on rising volume. That puts the GDX in position to challenge its previous highs near 64 formed late last year and this April. The rising relative strength line (below chart) shows that the precious metals group has done much better than the market this summer and have acted as a relative safe haven (even if it has lagged behind the parabolic gains in bullion). No less than six gold stocks hit 52 weeks highs on Monday making it the market's strongest group. Eldorado Gold (EGO), New Gold (NGD), Randgold (GOLD) and Royal Gold (RGLD) hit record highs, while Aurico (AUQ) and Yamana Gold (AUY) reached the highest level in three years.
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Chart 1
NEWMONT HITS 2011 HIGH ... Two of the largest gold miners have just achieved bullish breakouts. The stronger of the two is Newmont Mining (NEM). Chart 2 shows NEM surging more than 4% yesterday (on rising volume) and pushing it decisively above its first half highs. Its RS line (below chart) has turned up sharply during August. Chart 3 shows Barrick Gold (ABX) hitting a new four-month high. These two stocks may offer better value to investors who missed the move in bullion or some of the stronger miners who turned up much earlier.
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Chart 2
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Chart 3
SILVER STOCKS PLAY CATCH-UP ... Silver and its related stocks have lagged behind gold assets, but may be starting to play catch-up. The line above chart 4 shows silver prices (SLV) breaking out to a new three-month high. That gave a 6% boost to the Global X Silver Miners ETF (SIL) on rising volume. Chart 4 shows SIL nearing a test of its July peak. Its relative strength line (below chart) is rising as well. The biggest and strongest stock in the silver group is Silver Wheaton (SLW). Chart 5 shows the silver leader closing yesterday one tick above its July intra-day peak at 40.24. Another higher close would make Silver Wheaton the first silver stock to achieve a bullish breakout.
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Chart 4
