Gold and Silver have been perking up lately. More importantly the miners have been moving faster than the metals.
I am posting this blog on Tuesday and the precious metals stocks are flying even though Gold is unchanged on the day.
When the mining stocks outperform the metals, this is usually an excellent time to be invested in the industry.
Here is a chart of the miners compared to the metal. The huge breakout continues.
This suggests to me that Gold is finally going to break above the 5 year base. Last week it briefly broke out to new 1-year highs at 1369.40 but it receded. This week it is holding in really well and the miners are soaring even though Gold is flat.
Silver is also trying to break out. As the chart approaches three month highs, we can see that the relative strength in purple is near 5 month highs. It would not take much to send this chart soaring and show up on all kinds of scans for price action and relative strength.
This chart of USO shows the stalling action after breaking out. Consolidation is not a bad thing but we want oil to hold support here.
As well, I will be starting my new show, The Final Bar, on Thursdays at 5 PM ET. You'll find it on StockCharts TV which is on the StockCharts TV Tab.
Greg Schnell, CMT, MFTA