Can you see where mining stocks currently are relative to their 2023 decline? Gold just moved to its 61.8% retracement, but miners didn’t even manage to move to their 38.2% retracement.
In other words, miners seriously underperformed gold – this is no “small stuff”. This is a major indication that the big trend remains down. And that what you see on the mining stocks chart – the medium-term decline – and not what you see on the gold chart (sideways trading) represents the real status of the situation in the precious metals market.
Now, mining stocks reversed on Friday while also failing to break above their declining blue resistance line, which is another piece of the bearish puzzle.
In other words, the post-positive-news-release story unfolds almost exactly as in the past. Even though the situation is different, the numbers are different, and the world is different… The way that people reacted to bullish surprise in the data within a bearish trend remained the same.
I marked the previous analogous cases – reaction to data – with red dashed lines. That was at or right before an important short-term top and given Friday’s reversal and today’s early-session decline, it seems that we saw a top once again.
And you know what’s lurking in the bearish background? The link between all the above and the situation in the USD Index.