Juniors Show Relative Strength as Precious Metals Weaken

Despite three consecutive weeks of losses precious metals have failed to mount much of a rally. Gold closed last week above $1170 and may close this week below $1180. Meanwhile, Silver has struggled to mount any rebound and appears to have lost $16 as the week comes to a close. While the risk of a final breakdown is growing, one positive we see is the relative strength in the riskiest parts of the mining sector.
GDX tracks the senior miners (including royalty companies now) while GDXJ tracks what we would term “the largest juniors.” When the sector is performing well, we’d expect GDXJ to outperform and when the sector is performing poorly, we’d expect GDXJ to underperform. (more)

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