Gold Is on Fire – Here’s When & How to Trade or Buy Gold

Gold Is on Fire - Here's When  How to Trade or Buy Gold

Gold Is on Fire – Here’s When How to Trade or Buy Gold

– Richard Suttmeier 

These charts show you when, and how, to buy gold.

The price of gold has traded up and down since the election. Comex gold has been less volatile than gold mining stocks and the gold stock exchange-traded fund. Here’s how to trade gold stocks using weekly charts and key trading levels.

Shares of VanEck Vectors Gold Miners ETF (GDX) , Barrick Gold (ABX) , Yamana Gold (AUY) , Goldcorp (GG) and Newmont Mining (NEM) are outperforming gold futures both year to date and since the post-election lows. All five are in bull market territory from their post-election lows set between Nov. 14 and Dec. 20.

Gold futures closed Thursday at 1,219.4, up 5.9% year to date and 8.5% above the post-election low of 1,124.3, set on Dec. 15. The continuous nearby contract is 8.9% below its post-election high of 1,338.3. The gold futures contract has been trading back and forth around 1,196.0 since Nov. 11, with 1,301.3 a risky level for February. Semiannual value levels lag at 918.66 and 727.50, with annual risky levels at 1,660.1 and 1,674.1.

The VanEck Vectors Gold Miners ETF has 52 components, and Barrick Gold, Goldcorp and Newmont Mining are the heaviest-weighted stocks in the ETF at 11.05%, 7.01% and 9.75%, respectively. Yamana is a component with a 1.66% weighting, as this stock has been an “option on survival,” trading between $1 and $3 a share from time to time.

The Gold Miners ETF closed Thursday at $24.38, up 16.5% year to date. It is in bull market territory, 31.2% above its post-election low of $18.58, set on Dec. 20. The ETF set its post-election high of $25.70 on Nov. 9. It is 5.1% below this level.

Barrick Gold reports earnings after the closing bell on Feb. 15. Analysts expect the company to earn 20 cents a share. The stock closed Thursday at $18.94, up 18.5% year to date. It is in bull market territory, 37.1% above its post-election low of $13.81, set on Dec. 16. The stock set its post-election high of $18.97 on Feb. 2.

Yamana reports earnings after the closing bell on Feb. 16. Analysts expect the company to earn 3 cents a share. The stock closed Thursday at $3.36, up 19.2% year to date. It is in bull market territory, 36.2% above its post-election low of $2.46, set on Dec. 20. The stock set its post-election high of $3.80 on Nov. 9. Yamana has been trading back and forth around $3 a share since Nov. 11, moving in and out of the “option on survival” range of $1 to $3 a share.

Goldcorp reports earnings after the closing bell on Feb. 15. Analysts expect the company to earn 8 cents a share. The stock closed Thursday at $16.40, up 20.6% year to date. It is in bull market territory, 37.7% above its post-election low of $11.91, set on Dec. 15. The stock set its post-election high of $16.50 on Feb. 2.

Newmont Mining reports earnings after the closing bell on Feb. 11. Analysts expect the company to earn 41 cents a share. The stock closed Thursday at $36.68, up 7.7% year to date. It is in bull market territory, 21.5% above its post-election low of $30.19, set on Nov. 14. The stock set its post-election high of $38.40 on Nov. 9.

Here’s a scorecard for Comex gold, the gold ETF and the four gold mining stocks.

The weekly chart shows a red line through the price bars, marking the key weekly moving average (a five-week modified moving average). The green line is the 200-week simple moving average, the “reversion to the mean.”

The study in red along the bottom of the chart is weekly momentum (a 12x3x3 weekly slow stochastic), which scales between 00.00 and 100.00, where readings above 80.00 indicate overbought and readings below 20.00 indicate oversold.

A negative weekly chart shows the stock below its key weekly moving average, with weekly momentum declining below 80.00 in a trend toward 20.00. A positive weekly chart shows the stock above its key weekly moving average, with weekly momentum rising above 20.00 in a trend toward 80.00.

Here’s the weekly chart for the VanEck Vectors Gold Miners ETF.

Courtesy of MetaStock Xenith

The weekly chart is positive, with the ETF above its key weekly moving average of $22.59, and above its 200-week simple moving average at $22.15. The weekly momentum reading is projected to rise to 53.79 this week, up from 45.18 on Jan. 27.

Investors looking to buy the gold ETF should do so on weakness to $21.49, which is a key level on technical charts until the end of March. Investors looking to reduce holdings should sell strength to $27.28, which is a key level on technical charts until the end of February. The upside potential for 2017 is to $32.91.

Here’s the weekly chart for Barrick Gold.

The weekly chart is positive, with the stock above its key weekly moving average of $17.01 and above its 200-week simple moving average of $15.09. The weekly momentum reading is projected to rise to 63.16 this week, up from 53.31 on Jan. 27.

Investors looking to buy Barrick on weakness should do so at $16.68 and $15.91, which are key levels on technical charts until the end of 2017 and the end of March, respectively. Investors looking to reduce holdings should sell strength to $19.54, which is a key level on technical charts until the end of February.

Here’s the weekly chart for Yamana Gold.

The weekly chart is positive, with the stock above its key weekly moving average of $3.15 and well below its 200-week simple moving average of $5.77. The weekly momentum reading is projected to rise to 46.96 this week, up from 37.40 on Jan. 27.

Investors looking to buy Yamana on weakness should do so at $2.27, which is a key level on technical charts until the end of March. Investors looking to reduce holdings should sell strength to $3.65 and $5.08, which are key levels on technical charts until the end of February and the end of 2017, respectively.

Here’s the weekly chart for Goldcorp.

The weekly chart is positive, with the stock above its key weekly moving average of $14.89 and below its 200-week simple moving average of $20.21. The weekly momentum reading is projected to rise to 67.44 this week, up from 56.77 on Jan. 27.

Investors looking to buy Goldcorp on weakness should do so at $14.98 and $12.03, which are key levels on technical charts until the end of February and the end of March, respectively. Investors looking to reduce holdings should sell strength to $22.96, which is a key level on technical charts until the end of 2017.

Here’s the weekly chart for Newmont Mining.

The weekly chart is positive, with the stock above its key weekly moving average of $34.75 and well above its 200-week simple moving average of $26.75. The weekly momentum reading is projected to rise to 52.85 this week, up from 46.21 on Jan. 27.

Investors looking to buy Newmont on weakness should do so at $28.92, which is a key level on technical charts until the end of 2017. I show annual and monthly pivots of $35.58 and $37.16, respectively. Investors looking to reduce holdings should do so on strength to $42.43, which is a key level on technical charts until the end of February.

 

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Barrick Gold , Buy Gold , Comex Gold , Gold ETF , Gold Futures , Gold Miners ETF , Gold Mining Stocks , Goldcorp , Price of Gold , Weekly Chart , Yamana Gold


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