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| Metals and mining stocks have a positive outlook for the next two months. Currently, it would take a violation of the June lows to alter this view. |
Gold COT
Due to the holiday, this week's commitment of trader's data will be released July 9th. However, the previous release reported that the net commercial and speculative positions were down by more than 25k, to their lowest levels since January. This generated RSI readings into the overbought/oversold (60/40) regions.
With so many players having moved to the sidelines there is plenty of room for prices to move higher if the fundamental factors provide a catalyst.
The Rydex data (c/o www.sentimenTrader.com) shows participation in the precious metals sector to be at the lower end of the four year range.
Seasonal Tendencies favor a rally in stocks into September-October. In the past ten years the precious metal indices (XAU, HUI, TSX Gold) have rallied well from July through September-October.
Gold vs Mining Stocks
After underperforming bullion for fifteen months the XAU/Gold ratio has now broken out on the upside. Major rallies of the past three decades have seen such relative action in the stocks.
end of extract
-Bob Hoye
Institutional Advisors
email: bobhoye@institutionaladvisors.com
website: www.institutionaladvisors.com
CHARTWORKS - JULY 9, 2007
Hoye Archives
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