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Precious Metals Update – Intermediate Low at Hand
Precious metal investors have had a rough year with gold stocks down double-digits while gold is set to log another positive year. Gold stocks bottomed this summer as is their custom, but rather than rallying into the end of the year they’ve hit another rough patch and have given back much of their fall rally. However, the overbought condition in gold stocks leading into October has been worked off and it appears we may be seeing another intermediate low. The big caveat is the obvious fiscal cliff situation where politicians may drive the whole market down as they did with last year’s debt ceiling fiasco. Politics aside, we still have the setup of an intermediate low and gold stocks may begin to show signs of strength in the weeks ahead.
From Overbought to Oversold
The big fall rally that saw the NYSE Gold Bugs Index (HUI) rally nearly 40% in a span of two months produced a pretty overbought condition. Our Gold Stock indicator nearly hit an extreme overbought reading near 1.0 but has since returned back to near -1.0, a level that often marks significant intermediate lows.
Read More: http://www.stockgoldmarket.com/precious-metals-update-intermediate-low-at-hand
