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Gold Miners Dip, What Does This Mean?

|Includes: AEM, AUY, VanEck Vectors Gold Miners ETF (GDX), GOLD, NEM
This morning, the leading gold mining stocks are declining lower. It seems that gold and the leading gold mining stocks have begun to trade right along with the major stock market indexes once again. If you look at the popular Market Vectors Gold Miners ETF (NYSE:GDX) you will see that the GDX made a low on October 4, 2011 at $50.42 a share. This is the same day that the major stock indexes made a low as well. Since that day the GDX has rallied higher with the major stock indexes. This tells us that the gold miners are signaling inflation and deflation. Today the GDX is trading lower by $1.32 to $56.09 a share. This move is coinciding with a dip in the S&P 500 Index and the Dow Jones Industrial Average. The GDX will have some short term intra-day support around the $55.00 area.

Other leading gold miners that are declining today include Randgold Resources Ltd (NASDAQ:GOLD), Yamana Gold Inc (NYSE:AUY), Newmont Mining Corp (NYSE:NEM), and Agnico Eagle Mines Ltd (NYSE:AEM). Traders should follow the major stock indexes closely as the gold miners seem to be inflating and deflating with the major markets. A stronger U.S. Dollar Index will usually cause the gold miners to be weak. This action is telling us that there is deflation in this market place, however, the central banks will try and combat that by trying to keep the currencies such as the U.S. Dollar weak.

Nicholas Santiago