The price of gold keeps moving up. It’s the kind of action that fails to attract much attention because it seems to come in spurts: up a little, down a little, up a little.
This backing and filling comes while the consensus on Wall Street is that interest rates will soon be reduced as lowered inflation seems about to arrive.
So, it’s odd to see purchases of gold stocks since they’re generally perceived to be an inflation hedge — that is, some place to go when stocks and bonds are being dumped.
The key is: gold a fear indicator and typically that means fear of inflation — but it could be an early indicator of a different type of fear.
Maybe it has something to do with Moody’s recent downgrading of U. S. debt from “stable” to “negative.” Treasury bonds are not perfect in every way?
Hard to believe but talk to the analysts at Moody’s who had earlier in the year downgraded a number of U. S. regional banks.
Whatever the case, a few investors are making what might be early bets on a few precious metals stocks.
Gold Stocks Price Charts.
SPDR Gold Shares ETF closely tracks the price of gold and serves as a quick benchmark.
Today’s closing price exceeds the high of the best October high and it closed at the top of today’s trading range, a signal of strength. Note that the up trending 50-day moving average (the blue line) appears to be about to cross above the up trending 200-day moving average (the red line).
Compania de Minas Buenaventura is a Peruvian-based miner traded with a market capitalization of $2.35 billion.
It’s been trading above the August/September highs for a week and hit an even higher closing price today. You can see how the 50-day moving average crossed above the 200-day moving average back in late August. The stock continues to trade above both of them.
Harmony Gold Mining is headquartered in South Africa and has a market cap of $3.66 billion.
It’s a clear breakout above the early May level and the upward move steadily continues with a close of $5.90 today. The up trending 50-day moving average made it above the up trending 200-day moving average in mid-October. This miner is easily outperforming the price of the underlying metal.
Kinross Gold is based in Toronto, Canada, trades on the New York Stock Exchange and shows a market capitalization of $7.01 billion.
With today’s close of $5.71, the previous resistance at $5.60 is taken out. Both of the significant moving averages are in uptrend mode.
Just for the record, here’s the daily price chart for the other actively traded precious metal:
If silver can make it above those July and August highs — and it’s beginning to look as if it wants to — then the next stage would be an attempt to overcome the resistance at just below $24 from early May.
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