Gold Should Bounce Off Support and Move Higher

Barrick Gold (ABX) is performing considerably better than the TSX, but is under-performing GLD (gold etf). If my analysis of gold is correct it should bounce off support and move higher from these levels. You’ll be safe in ABX as a rising tide should lift all boats, but in my view there are stronger gold stocks out there like AZK, EGO, GOLD, HMY, IAG, RGLD. I started a position in RGLD yesterday, but was to distracted by the overall market to do to much with gold yesterday.

Comments

[joethebull:]

Nearly all of the gold miners are hitting key support points after a short correction and should rally along with the rest of the market. However, Gold itself is in a major correction, and although it too may find support and edge higher on a few occasions in the immediate term, the short term trend is still downward - possibly as far as $800 or below.

With this in mind, adding positions in the gold miners might not be the best play for this rally, as there are other sectors that will see more dramatic movement (financials, anyone?). It's not a losing bet, but there is a good chance the miners will revisit their current prices once again later in the year as well (and much lower). Gold and gold mining is going to be a phenomenal play for the next few years -- but for those looking to go long now should wait until the correction is complete and this current bear market rally subsides.

Mar 12 11:20 AM