Gold Shares Coming to Life

traderdannorcini.blogspot.com / Dan Norcini /
I have been watching the HUI encountering difficulties with that stubborn overhead resistance level near the 225 region for a while now but today it finally managed to punch through. One needs to be suspect about any moves in gold itself if the gold shares fail to confirm it for whether we like it or not, the shares tend to lead the metal, both up and down.

Today’s move higher in the HUI is the first real sign that this recent move higher has the potential to be something more than a mere short covering bout that has run its course. If you notice on the chart the price has been oscillating around the 100 day moving average for the last two weeks while it has been locked in a fairly tight range. It wasted no time today in dispatching that key level.
To see this index gap higher above last week’s higher on today’s open and punch through the top of the resistance band noted, is a sign that there might be some legs to this thing.
From a fundamental perspective, it seems that the austerity programs being instituted by some of these mining companies has convinced some larger investors that management is getting serious about controlling costs ( something that very few of them did during the bullish phase in gold before it entered its recent bearish phase). That has them more comfortable taking a position in the sector for now.
READ MORE
Please share this article