Gold Miners Inch Higher Early
The leading gold mining stocks have been market laggards since putting in a pivot high on April 8, 2011. The popular and highly traded Market Vectors Gold Miners ETF(NYSE:GDX) topped out at $64.14 a share which was actually a lower high from the December 7, 2011 top made which was $64.62 a share. Whenever an index makes a lower high it is usually a sign of bearish action to follow. Since the $64.00 high on April 8, 2011 at $64.14 a share, the GDX has declined lower by $10.00 a share. In the near term the GDX is oversold, however, the GDX is now in a down trend on the daily chart by trading below all of the major moving averages. This tells us that bounces will usually be sold until the GDX can recapture one of those moving averages. Therefore, any rallies in the GDX should be short term. Intra-day the GDX will have intra-day resistance around the $55.50 area.
Other gold mining stocks that are bouncing higher this morning are Newmont Mining Corp.(NYSE:NEM), Randgold Resources LTD.(NASDAQ:GOLD), and Goldcorp Inc.(NYSE:GG). These leading gold mining stocks will often trade right along with the GDX. Generally, all of these stocks and the precious metals could see better bounces if the U.S. Dollar Index declines.