We’ve been promised Santa rallies by a lot of the talking heads, but the only one I can spot is in precious metals. Price of gold and silver, and to a lesser degree copper, have rallied these past few weeks. Take a peek at the gold cash contract chart below.
Numerous reasons stand available, but I think so far one should not assume more than a temporary gold bounce due to the cracking dollar. The twitter grapevine whisper has been intense, likely because people will jump on anything by now in the attempt to force a profit.
I don’t dabble in commodities, however looking at the better-quality mining shares I can tell that it is largely premature to call this a new uptrend. Gold itself has arguably broken its intermediate-term down-trend for now, but it and silver first have to reliably go through a proper trend reversal involving breaking long-term trendlines, retesting the Lows and breaching pivot points on volume.
This might still develop into a better trend, but mining stocks (check long-term charts of FNV, GOLD, NEM, GFI, etc) have to first dig themselves out of long-term downtrends and overhead supply before I can become interested in such trades.
Have a wonderful day!
