Plan, you may be correct. However, it is still a red flag and should put traders on alert. I am a technical trader and Gold has made higher highs and lows, which indicates the uptrend is in tact. However, GDX has broken below the previous low indicating a POTENTIAL change in trend. Moonlightxpress has the edge in their strategy as long as the price stays below the previous high. It will be interesting to see what GDX will do this morning, as Gold Futures are much higher.
Plan, Thank you for making my point. I've noticed that people on here have no clue about anything. THIS IS AN ETF that holds 31 different gold mining STOCKS! Not a levered etf (ugl, uco, dxo, ung... Ect.) And yes the gold miners have lagged the price of gold. Not sure why that is the case. Some of the larger cap names in the index have flown though. See IAG, GG, GOLD, ABX, NEM are all at 1 year highes. I believe that the smaller cap names (I.E. The juniors which will be in the new etf should they launch it) are lagging. No clue as to why.
Miners hedge their production. Just because gold is at $1100 does not mean that ABC mining corp is selling their mined gold for $1100. They could be selling it for $800. With the cash & credit crunch that they experienced, it is likely that they overhedged in order to keep credit lines and hence gave up a lot of gains.
Yes it def is complex issue. I spent some time trying to figure out whether there was a good strat trading XLE USO in pairs but could never find one and I think GDX GLD is v similar. Just too many factors that are unrelated....
GDX gapped up at the open and made a new high intraday today, however, it closed near the lows of the session. GLD had the same price action. GLD has been riding inside a rising parallel trend line since the low in July. As you can see in the chart, the price is riding up against the top trend line. That is a good reason to expect a price decline in the next couple of days. The question is how much of a decline. If you use Elliott Wave Analysis as part of your trading tools, you may also notice a complete five waves up from the 10/30/09 low in GDX. GLD can be a complete if the final five waves from the 11/4/09 low is an ending diagonal. GLD could potentially make a push higher tomorrow morning, which would most likely complete the wave pattern. Wave counts of 3, 7, and 11 are corrective in nature according to Elliott Wave Analysis. As you can see in the chart, GLD has traced out seven waves from the 7/8/09 low. This is another reason for an argument for a potential top or nearly so in GLD. The critical level to indicate a top is complete is the break below the 10/28/09 low.
Some people say that GDX is "due" to "catch up" with gold prices. Maybe that's happening today, with GDX up 6%.
GDX still lagging badly. Any thoughts on this? Is it a sign that the current price of gold is not sustainable? Is this like when Oil was 147 and the oil stocks weren't keeping up? I tend to think that the GDX will catch up but am interested in others thoughts.