GDX Not Confirming Gold Rally is a Warning for Gold Bugs

Gold is strong, but the Gold Miners (GDX) are not. Historically when this happens it foreshadows what will happen in gold. Basically, GDX often confirms or leads gold moves. When GDX and GLD are both moving up that is a much better situation than just GLD moving up. When GDX weakens before gold, gold typically follows into weakness.

This is not a prediction that gold prices will decline or can't rally further. I am simply pointing out that historically GDX confirms or leads in the biggest gold rallies. That it isn't happening right now isn't ideal for gold.

GDX also tends to make much bigger percentage moves, so I prefer trading GDX or the gold mining stocks compared to GLD. GDX is more sensitive to market sentiment.

Cory Mitchell, CMT
https://tradethatswing.com/
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