I have been busy and without a number of files to compile the precious metal stock timing model statistics. In any event, precious metal shares remain, for lack of a better description, overbought. Even with the pullback in gold we are seeing this morning along with a projected rise in money supply results in a timing model indicator of +2 on the 6-month compilation and a 0.51 on the 1-year model. The models are updated in the graphs below.
6-month model
1-year model
These indicators remain in ranges indicate that precious metal stocks will underperform the average on a go forward basis. I think this pending underperformance is being confirmed in the price/volume trend of the Market Vectors Gold Miner ETF (ticker GDX). The GDX hit my $52 target and then some. Since reaching the $52 level, the volume has been short of the benchmark volume rates in early February and late March of 2012. This probably indicates the rally past $52 is on little demand, as the operators probe higher prices to gauge the supply and demand lines.
I think that precious metal stocks are susceptible to a decline at these levels and would not commit new capital in this sector.
6-month model
1-year model
These indicators remain in ranges indicate that precious metal stocks will underperform the average on a go forward basis. I think this pending underperformance is being confirmed in the price/volume trend of the Market Vectors Gold Miner ETF (ticker GDX). The GDX hit my $52 target and then some. Since reaching the $52 level, the volume has been short of the benchmark volume rates in early February and late March of 2012. This probably indicates the rally past $52 is on little demand, as the operators probe higher prices to gauge the supply and demand lines.
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