From the Desk of Ian Culley @IanCulley

You can’t keep the gold bugs down.

They’re a hearty bunch full of true grit, choosing to focus on the silver lining while persevering through countless downturns.

Gold, on the other hand, has been an easy target…

Every time buyers have managed to drive the price back to the 2,089 level… 

Rejected! 

Sellers have stepped in, capping price while breaking the hearts of gold bugs everywhere. 

Or so I thought. It turns out you can’t break a gold bug’s heart. 

Try as they might, sellers are no match for gold bugs’ bullish conviction. 

Buyers rushed in, driving price higher following last month’s breakdown:

I’ll admit, I didn’t see this week’s retest and possible breakout coming.

The market simply wore me down. I guess I’m not what you might consider a true gold bug. 

You can call me weak if you like. But that won’t stop me from buying gold futures on a decisive daily close above 2,100 with a target of approximately 2,500.

And it shouldn’t stop you, either.

Gold mining stocks will also spring back to life if gold...

From the Desk of Ian Culley @IanCulley

The market is punishing investors for owning gold mining stocks.

Sure, a handful of gold miners are holding above key levels.

Buenaventura S.A.A. $BVN, Orla Mining $ORLA, and Harmony Gold $HMY belong to this elite group of outperformers.

But that’s about it.

I’m not giving these trades too much room. And I’m not piling into new long positions. Not yet! 

Here’s why…

Gold mining stocks continue to print fresh lows versus the broader market.

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

Since its inception in 2006, GDX has never traded at this much of a discount to the S&P 500. This is the exact opposite of what we would see if gold and other precious metals were in an uptrend.

The strongest trending assets outperform their alternatives. 

On the other hand, precious metals are exhibiting relative weakness – a clear sign of a severe downtrend.

Investors are more interested in buying NVIDIA Corp. $NVDA and Super Micro Computer $SMCI.

No one wants to own shares of companies that dig in the...

From the Desk of Ian Culley @IanCulley

Gold’s beginning to attract some attention.

Not because it was shooting higher but because it kept trading while most respectable markets closed in observance of Presidents Day.

US stocks, grains, and other god-fearing commodities did not trade. So investors needed something to talk about other than Bitcoin. 

But as gold stole the headlines, no one was talking about platinum.

I like that platinum isn’t attracting too many eyeballs right now.

Here’s why…

Platinum futures are carving out a potential multi-year reversal pattern.

A series of former highs (the 2021, 2022, and 2023 peaks) mark a critical area of overhead supply and our breakout level at approximately 1,140.

But no one seems to care – probably because price is trading well below a reasonable risk level. 

Precious metals – not just gold and silver – are a range-bound mess at best. Yet glimmers of hope lie within platinum’s sideways chop.

Momentum (14-week RSI) is oscillating within a bullish regime. Price is also holding above the 2022 and 2023 lows.

I understand if those data points...

From the Desk of Ian Culley @IanCulley

I’m fed up with precious metals. 

I’m tired of all the failed breakouts and the sideways chop.

So, please, spare me the silver-surfer stories about undervalued silver or how it will outperform gold 16-to-1 during the next bull run. 

I’m tired of it – all of it!

But the diehard gold bugs continue to rally the troops – and maybe they’re on to something.

After all, gold is trading less than a hundred bucks from its all-time high. Is there still a chance for a clean breakout soon?

Let’s take a cold, hard look…

Check out gold’s four-year base:

I can’t lie: This is the type of base that gets me out of bed in the morning.

It’s a classic inverted head-and-shoulders with an abbreviated right shoulder. It oozes demand!

Plus, momentum is in a bullish regime. This thing looks ready to rip! 

But I’m over it.

Funny how that works. The markets are here to test us, causing maximum pain whenever possible.

So is the market just wearing me down?

Gold futures are coiling within a well-defined symmetrical triangle just below a...

From the Desk of Ian Culley @IanCulley

If silver doesn’t come to play, precious metals won’t win the day.

Gold’s resilience has been impressive lately, especially as its two main headwinds – the US dollar and real yields – catch higher. 

But while all eyes are following gold as it coils just below all-time highs, I’m tracking silver. Because gold’s doggedness is all for naught if silver breaks down.

Check out the iShares Silver Trust ETF $SLV retesting a critical former support level at approximately 20.50:

Perhaps it’s not the cleanest level. 

Nevertheless, plenty of price memory exists at this shelf of former lows. If SLV undercuts those former lows, precious metals will fall under increased selling pressure.

Gold futures will break down below 2,000. The Gold Miners ETF $GDX will fade below 30. And the handful of breakouts we’ve witnessed over the past few months will fail.

Plus, the silver-to-gold ratio will likely post a fresh 52-week low:

It’s another breakdown gold bugs prefer to avoid.

Silver dropping relative to gold signals a low turnout as investors are being rewarded...

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.

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...

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...

From the Desk of Ian Culley @IanCulley

I’ve had palladium on my mind for a while – long before gold posted a new all-time high.

Why palladium?

It all started with an extreme Commitment of Traders (COT) profile…

Check out the longer-term chart of palladium futures with the COT in the lower pane:

Commercial hedgers posted a new record-long position back in April.

Notice the sustained trends following similar commercial positions in 2012, 2016, and 2018. 

Commercials represent the strongest hands with the deepest pockets. Plus, they have inside knowledge of the supply and demand dynamics of the market in question. It’s OK to think of them as “smart money.” 

But record-long positioning isn’t a signal on its own. It doesn’t help us define our risk. It simply indicates the market structure.

Case in point: Record-breaking long positioning became the norm for commercials as price continued to fall throughout the year.

Holding a long position since the spring required deep pockets and proved a painful opportunity cost.

But the pain of owning palladium is likely behind us as long as the futures...