Both Gold and Silver Futures have been struggling to rally above recent high levels since the start of the global stock market collapse related to the COVID-19 virus event. Yet, the Junior Gold Miners appear to be telling us the Precious Metals market is boiling hot.
Gold, the bell-weather safe-haven asset, initially collapsed when the US stock market started the massive selloff in late February 2020, then recovered to higher price levels near $1785 recently. Since reaching these levels, Gold has stalled into a sideways price flag near major resistance.
Silver, on the other hand, is trading near $15.60 and has yet to really recover to anywhere near the levels it had achieved in early January 2020 (near $18.60).
Well, GDXJ, the Junior Gold Miners ETF, is suggesting a very strong price rally is taking place that may push both Gold and Silver substantially higher. Key resistance exists near $46.50. Once broken we believe a very strong price rally will take place pushing GDXJ price levels to $51 or $52. After that, a brief downside rotation will potentially retest the $47 to $48 levels before an even bigger upside rally takes place. What is even more important is that we believe this big breakout move could start as early as next week, May 12th or after.
This GDXJ Weekly chart highlights the same price pattern and shows why we believe the upside price breakout could be a massive new trend. The Deep price low setup because of the COVID-19 virus event creates a very big price range for any future price advancements. That $24 price range, if applied to price levels before the breakdown event near $41, may suggest GDXJ could rally to levels above $65 over the next few weeks or months.
GDXJ WEEKLY CHART
We believe the upside rally in both Gold and Silver recently is a very good indication that the sideways price channel that has plagued precious metals recently may be ending. If precious metals prices begin to rally, then GDXJ will break the upper $46.50 resistance level and begin a new upside price rally clearing the resistance setup before the virus event began.
Get ready, this could be a very big move higher for Junior Miners and it could align with our May 8th through May 12th global market inflection point prediction.
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Chris Vermeulen Chief Market Strategist Founder of Technical Traders Ltd.
https://www.thegoldandoilguy.com/wp-content/uploads/2020/05/12.png574850adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2020-05-08 08:21:152020-05-08 08:21:15Junior Gold Miners Ready To Run