Precious Metals Sector Due for Bounce but… $GOLD, $GDX

The precious metals sector has declined sharply in recent weeks with no pause or intermittent breaks in the decline. Including today, Gold is down eight consecutive days and 16 of the past 18 days. The gold miners (GDX) have lost roughly 20% in the past seven days. The sector is extremely oversold in the short term and a reflex rally could begin in the next few days. While Gold and gold bugs should get temporary relief, the larger picture remains quite bearish. 

The daily candle charts of Gold and GDX are included in the image below. (Note that Gold is not updated today). Gold which has traded as low as $1084/oz today, has support in the $1080/oz to $1100/oz zone. Meanwhile, GDX after gapping lower today found support around $13.50. GDX has good support in the $13.00 to $13.50 area. Gold and gold stocks are very oversold and have reached levels at which a bounce could begin.  (more)