From the Desk of Ian Culley @IanCulley

Precious metal charts aren’t painting a bullish picture for investors.

Silver is underperforming gold. The Gold Miners ETF $GDX is posting new all-time lows versus the broader market. And everywhere you look, individual gold mining stocks are breaking down.

Well, not all mining stocks. One chart continues to fly high…

Check out Buenaventura S.A.A. $BVN:

BVN has gained over 70% since bouncing off last month’s lows, slicing through our initial and secondary targets. 

Now, it’s coiling in a potential bullish flag just above our risk level. 

The pennant or flag is a continuation pattern by nature, often resolving in the direction of the underlying trend.

My bias points higher toward 20, given the preceding rally. But I can’t hold BVN if it slips below 14.25. That’s our line in the sand.

If this potential bull flag fails, I imagine precious metals are a “no-touch” across the board.

The Harmony Gold Mining $HMY and Eldorado Gold $EGO breakouts likely fail in that environment. And the corrections in the bellwethers – Franco Nevada $FNV...

From the Desk of Ian Culley @IanCulley

First, gold failed to hold its breakout to new all-time highs.

Then, the silver-to-gold ratio undercut a critical shelf of former lows.

Now, the Gold Miners ETF $GDX is printing a new all-time low versus the broader market!

Is there any sane reason to bet on the miners right now?

Let’s take a look…

Check out GDX relative to the S&P 500 ETF $SPY: 

If precious metals are in a bull market, the stocks that benefit the most in that environment are not making new all-time relative lows versus the broader market.

And if the new all-time relative low isn’t enough, the components of the Philadelphia Gold & Silver Index cover it:

Only one – Eldorado Gold $EGO – out of the 30 stocks in the index did not print a fresh four-week low last week.

Ugly!

Yet plenty of gold mining stocks continue to carve out bullish reversal formations despite the broad near-term weakness.

Orla Mining $ORLA stands out:

ORLA is forming a potential inverted head and shoulder pattern as the 14-day RSI posts a bullish divergence.

This is the video recording of the January 2024 Mid-month Conference Call.

From the Desk of Ian Culley @IanCulley

The US dollar is marching higher, stomping gold mining stocks into dust.

Harmony $HMY, Kinross $KGC, and Eldorado Gold $EGO are hovering just above last month’s breakout levels.

And Franco Nevada $FNV –  a secular leader among royalty companies – is sliding toward fresh multi-year lows!

Check out FNV undercutting a shelf of former lows:

I’m not crazy about shorting it. But you can’t own FNV below its 2022 lows at approximately 110.

The path of least resistance points toward 80 if it trades below those former lows.

A Franco-Nevada breakdown shines an unfavorable light on the current condition of the precious metals space. But FNV is taking a different course than most royalty companies.

Here’s a performance chart of FNV, Royal Gold $RGLD, Osisko Gold Royalties $OR, and the SPDR Gold Trust ETF $GLD since last March:

The returns carry less significance here than the divergence beginning last fall.

OR, RGLD, and GLD bottomed last October (when the US dollar peaked – not a coincidence) while FNV continued to fall.

I have no idea what’s going on at FNV....

From the Desk of Ian Culley @IanCulley

A risk-off tone is blanketing the precious metal space as a key data point suggests more pain ahead…

Silver is underperforming gold.

Check out silver undercutting a shelf of former lows relative to gold:

The breakdown signals a lack of interest or risk-seeking behavior in the higher-beta vehicle.

When silver fails to catch a relative bid, the entire precious metals space tends to follow. 

Last month’s breakout in the Silver Miners ETF $SIL is failing to hold:

It’s simple: We can’t carry a long SIL position if it trades below 28.

These stocks will eventually resolve higher. But sellers have the upper hand for now.

The Gold Miners ETF $GDX is also sliding:

The 30 level remains our line in the sand. I don’t want anything to do with GDX below that level. 

It’s hard to imagine gold futures decisively breaking to new all-time highs while GDX trades below its former 2016 high.  

The same analysis applies to the MSCI Global Gold Miners ETF $RING:

The next secular bull run for gold mining stocks remains on hold...

This is the video recording of our January 2nd Monthly Charts Live Strategy Session

From the Desk of Ian Culley @IanCulley

The first day of trading is full of uncertainty and excitement. 

Aren’t they all!

Yet the new year brings one promise: events that have yet to come.

As corny as it sounds, it’s true.

Sure, precious metal bulls see new all-time highs for gold on the horizon.

I’m right there with them.

But let’s not get ahead of ourselves on day one.

Instead, let’s start the year with a long-term chart of gold…

Here’s a monthly candlestick chart zoomed out roughly 30 years:

The main takeaway to start the year: Gold has yet to break out. 

Yes, gold recently hit a new all-time high. But it will remain a range-bound mess until buyers absorb supply at approximately 2,100. 

We can talk about gold 2,500 or 3,250 once it clears that critical supply zone.

Meanwhile, silver mining stocks are showing strength. 

The Silver Miners ETF $SIL is struggling to hold last week’s breakout as the US dollar bounces off a former support level.

We can expect near-term weakness for precious metals when the USD catches a bid, especially the...

From the Desk of Ian Culley @IanCulley

The buzz around gold’s new all-time high is growing – and for good reason.

New all-time highs will likely become a regular occurrence in the coming quarters. 

But while gold makes headlines, my attention is on silver mining stocks…

Check out the Silver Miners ETF $SIL carving out a potential double bottom:

SIL is printing fresh six-month highs as it trades back above its June peak.

I consider it a breakout.

Completing this near-term base will likely catapult these stocks through the polarity zone and the double bottom breakout level. 

I like SIL long – only if it’s above 28 – targeting 40 in the coming quarters.

Perhaps the upside objective sounds a bit overzealous.

But when we zoom out, it’s clear that SIL has serious ground to cover before reaching those former 2020 highs:

In fact, the 55 level marks a logical target for a longer-term position. 

Consider it our secondary target. If gold is bouncing to a steady beat of new all-time highs, SIL is running back to that decade-long resistance zone.

It’s the perfect environment for...

This is the video recording of the December 2023 Mid-month Conference Call.