Stick with the precious metals – March 13, 2025
Dan Fitzpatrick here at StockMarketMentor.com and Fitz and Five. I want to talk about gold.
The market basically sucks all the way around, except for gold. In our Strategy Session today I gave a pretty detailed explanation of stochastics and RSI. In particular, these are actually not overbought, oversold indicators, they’re momentum indicators.
When you get stochastics persistently on the upside, and RSI as well, that’s a strong market, you want to be long, and you don’t want to be selling. You need to be protecting your gains but you want to be long. When this is down here below these horizontal lines I wouldn’t want to be short, not in bull markets.
You definitely don’t want to be long, you want to be cautious, waiting for a nice move to the upside. So I’m going to get rid of these and we’ll just look at the typical charts. Just suffice it to say gold and the gold stocks are actually doing okay. If we look at gold here you’ll see we got a nice clean breakout here today.
At Stock Market Mentor I’ve been talking about this for a while, how this looks really good. This is kind of a high handle on this really ugly creative cup and handle. You could say this is a cup, and then you get a breakout. Then this actually moved about 5 percent above the breakout level before we got any kind of a pullback.
Now we’re getting a continuation to the upside, and it actually looks like it’s coming out of a bit of a volatility squeeze. You could see the Bollinger Band starting to fan out like this a little bit. They do that when a stock has been squeezing for a bit. It’s been a little bit higher volatility than I like. A lot of times the market doesn’t give me exactly what I like.
The gold stocks really are working. In particular, if you look at Agnico Eagle ( NYSE: AEM ), this is a more textbook volatility squeeze. It’s a breakout to the upside, this actually works pretty well. We got a shakeout here where this gapped down on the last day of February, and then immediately reversed and now it’s up almost 3 percent from there.
This is not a super volatile issue, at least not right now. Back then, I think somebody would say, well if it goes up 30 percent in a month and a half that’s kind of volatile to me. I would say that’s actually not volatility, that’s just a really strong move. During this period of time, you get this up-and-down move, but now we’ve got a nice move to the upside from here.
Now, if we look at Kinross ( NYSE: KGC ) this gives you a slightly different view. We get a gap down here and then a move back up above the 50-day moving average. Then we come up here, that’s all well and good, yay for me. Then we get this move here, and then a gap down to here. And then a really, really horrible close.
That’s all nice, a bad close, a wide range, not a good close, and a horrible close right here. But it’s above this level, so this is one thing. But what we really want to see is what happens next. And what happens next is, this move here was totally rejected. Buyers came in, boom, and bought this on about average volume.
Then we get a nothing day here, which happens. You look at all these up-and-down little moves, these intraday moves. And then finally, what are we at? We’re here on Thursday, today, and we’ve got another move to the upside. I think gold is ultimately going higher.
I’m not a huge gold fan, I own some, but I’m just looking at this from a chart standpoint. Your breakout would actually be above the high here of 11.57. Here, if or when the stock pushes above 11.57, then that’s a new high for this zigzag here, it’s like it completes the W. And so this is one way that you can participate in gold.
You can also do the GDX ( NYSEARCA: GDX ). This was a great breakout today, probably the best of them all. When I see this, again, this tells me that gold is where you want to be, semiconductors are not. We want to be where the buyers are. Then this ( NYSEARCA: GDXJ ) is the mini gold miners, the smaller cap companies, again, a nice move to the upside.
I’ll just tell you this, I’ve gone through a lot of sectors, a crap load of stocks here, and I don’t find anything that’s worthwhile, other than this gold stuff. I think Silver is working okay too. I’m differentiating between gold, silver, and then steel, stuff like that. For example, this isn’t working ( INDEXDJX: DJUSST ). This ( NYSEARCA: GDXJ ) is where you want to be, silver and gold, just like the song goes.
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