It’s Been a Bloodbath in Precious Metals and Miners

It’s been a painful three weeks for gold bulls, or anyone who has been long precious metals or gold and silver miners, for that matter.

Take a look at how the precious metals and gold miners have performed since April 17th:

  • Gold down over 5%,
  • Silver plunged a whopping 13%,
  • Platinum down over 9%,
  • GDX, the large-cap gold- and silver-miner ETF, down almost 12%, and
  • GDXJ, the junior gold- and silver-miner ETF, fared much worse, down over 16%.

It’s been an absolute bloodbath.

Last week, a trapdoor opened underneath gold, silver and the miners, with the yellow metal plunging over $40 an ounce.

Gold closed on Friday at $1,227, violating key daily supports at $1,250 and $1,245 in the process. That turns the short-term trend bearish, warning that a further decline is possible. And the weekly close below these levels confirmed a bearish posture near term.

The metals and miners are all deeply oversold, but is the worst of the selling pressure finally over?

According to our Edelson Institute E-Wave cycle forecast model – not quite yet.

As you can see in the chart on gold, we should see a near-term bounce in gold sometime soon, before the downtrend is expected to continue into early June. The charts for silver and for gold and silver miners all show a very similar pattern to that of gold.

However, as mentioned above, gold and silver are quite oversold already, with gold down nine out of the past 15 trading days. And for silver, the selling has been more intense, down 14 of the past 15 trading days, ditto for the miners.

Following a sudden, waterfall decline like this, the best trading strategy is to wait for an oversold bounce to reassess your holdings, NOT to sell in a blind panic with the markets so deeply oversold already.

Also, don’t forget that some of this selling pressure can be attributed to the rebalancing of the underlying index for GDXJ (VanEck Vectors Junior Gold Miners ETF). The indiscriminate selling has put pressure on the sector due to the redefining of the index methodology and NOT based on the underlying fundamentals of companies that make up the index.

There are still a lot of high-quality companies being sold off for no good reason, other than market cap. Once the dust has settled, this may provide an excellent buying opportunity for attentive investors to pick up some high-quality, small-cap, mining stocks on the cheap. Stay tuned!

Good investing,

Mike Burnick

P.S. This correction in gold and silver mining stocks is creating bargain buying opportunities for patient, long-term investors. Right now, we’re tracking over 40 select, high-quality mining stocks on our Gold Mining Millionaire watch list. Click here for full, unrestricted lifetime access.

 

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Comments 23

  1. siggyski36 May 8, 2017

    Are there options on the Dow & Nasdaq?

    Reply

  2. Phil Wilson May 8, 2017

    Mike, are you going to talk about the split that occurred with JDST? Seems like this ETF is now out of reach for the average investor. Can you comment?

    Reply

  3. john willis May 8, 2017

    You are telling Noah about the flood brother. Still I am doggedly accumulating miners and have been accumulating gold for 50 years. When the worm really turns all the pain will hopefully have been worth it.

    Reply

  4. Larry Stevens May 8, 2017

    How was the index methodology of JNUG redefined? Is it not still 3x the percent gain/loss of GDXJ?

    Reply

  5. Ray May 8, 2017

    I’m confused you have never mentioned anything about the Slimy Swampy Banksters that rinse wash and recycle the commodity (PM) market’s monthly. Reportedly stashing $210.000.000 just last week. I’m sure I’m seeing more reports than ever about the manipulation of paper trades bombing the Market.

    Reply

  6. William E. Miller May 8, 2017

    Mike, the e-wave cycle chart above is calling for a much deeper retreat in prices than where we are today, on June 1st and July 1st. Can you put some spot numbers with these 2 drops in price? May be Harry Dent is correct, $700.00 Gold?
    Thanks,
    Bill

    Reply

  7. Greg Marciniak May 8, 2017

    Learn more Elliott Wave Mike. I am not well versed and even I could see this one coming.

    Reply

  8. Tom M May 8, 2017

    And Bitcoin is up over 30% since mid April. Looks to me that it is replacing gold and silver as the speculator’s choice of opportunity. I don’t think gold is going to hit new highs for at least another 3-5 years. It doesn’t make much sense that silver had its highest usage demand ever in 2016 and went exactly nowhere.

    Reply

  9. John Cadwallader May 8, 2017

    Tell me Mike, is the gold and silver markets being manipulated or not? I’m one of the first arrivers at the party and I haven’t even had a drink yet! I have refused to take anymore losses, so I am trapped financially, sitting with lots of potential sans flexibility. Your forecast was for gold and silver to be on the rise well into May. Needless to say, that
    did not “pan” out. Johannes

    Reply

  10. Thomas Johnson May 8, 2017

    Mike
    I have visited with Larry for some years about the date and numbers on his grafts. In this edition I did control + 5 times and it was still hard to read the levels and dates. After a time he did add a “click for larger view”. Since his death you no longer include this feature. I know I’m old and half blind but with the programs available today I have a hard time understanding why this is so much of a problem.
    Thanks so much for continuing Larry’s work. I always looked forward to his letters and I feel he was right on more than the others!

    tj

    Reply

  11. $1,000 gold May 8, 2017

    i’ll say it again, gold is toast.

    Reply

  12. Ho May 8, 2017

    The problem with you people is you flooded people even subscriber with so much advertisement so that subscriber do not know What is truth and what is advertisement. It is information overload. I just don’t have time to read all as I have only 24 hours day and have so many other things to take care of

    Reply

  13. Nick Delis May 8, 2017

    This clarified this morning s report.

    Reply

  14. Ron May 8, 2017

    Hi All,
    Maybe it is not that Gold Dropped, but instead it may have more to do with the US use of force in Syria, sending 59 Missiles there to pay back for the use of Chemical Weapons… The Red Line in the Sand was crossed and finally something was done to show that there are consequences..

    If Gold drops more than a few percent it will eventually recover, but only those who bought on a Margin Account
    will lose big time… for taking a risk and hoping they are right. Shaking the “Playahs” up, is not really a bad thing,
    After all, they flocked to Gold when they gave up on playing the dropping Oil Market.
    I guess, this is why we are always advised to Diversify.
    It only took a few big players getting out of Gold to start the slide… What did they know and WHO told them about
    a missile strike coming soon… ? That is the question that needs to be asked.

    Reply

  15. mswak May 9, 2017

    why does this prediction chart look different than earlier charts? If I seen this discrepancy in several charts from earlier versions several times. it seems like the prediction chart is updated with current actual gold prices and then displayed as what was predicted. For example an earlier chart back in march showed gold to have a significant run up from about apr 21-may 5 which it did not( and now shown as a much smaller increase on current chart). Also In Larry’s “holiday #2 gift to you” gold chart it showed a huge increase from mid may through about jul 1 with significantly larger price than that of the march time period. Now this chart shows a significant drop throughout may and what looks a much smaller increase like a dead cat bounce from jun 6-jun 24. Any explanation?

    Reply

  16. Bill May 9, 2017

    Sorry guys, but these are just manipulated markets. Charts and technicals no longer matter as the boys can click what ever price they want. The game will go on until the crimex has no gold left.

    Reply

  17. Marc Beesley May 10, 2017

    Why hold down the price of gold and silver or all metals?

    The federal Reseve sell the right to print money to the world. They make a profit on every dollars printed. And they don’t even print the money or buy the paper and ink.
    This has been going on since 1913 but in 1970 when we went off the gold standard they saw the end coming. These are very bright people that run the world, They own the energy company’s they own the food production, the government they run the show.
    The problem with leaving the gold standard is the dollar loses it backing and you can now print as much as you would like. This is great they make even more money but there is a problem some day the money won’t be worth anything. So these very bright people see and understand they need to take action to turn thing to there favor in the upcoming future. Because when the money loses value your 401 K and everything you have worked your life for is gone. The world has to have a currency to exist but the people that lost everything are not going back to a fiat currency there going to demand it be backed in gold and silver. So if you are one of these very bright people that want to remain in power you see this coming gold and silver will rule. And so you need to own the gold and silver sector so you must buy the mining company’s and the best way to do that is to reduce the stock price of the company you in tend to take over. And how do you reduce the price of the company’s? You make what there selling worthless in the eye of the people. And in the middle of the kayos created by the collapse of the dollar, you walk in and buy the company for peanuts. You kept the price of metals where the company could stay alive until the time is right to take it over. Smart ya that’s why they run the show they have the money to keep the price were they won’t it and when metals explode they own them. This is a win,
    win for the powers that be. Think about it can they really do this? Why not? The piles of money there sitting on are worthless. They have played this hand in to the ground. They need a new game, own the gold and silver not just 500 million oz like JP Morgan but all of it for the next 100 years. If you can’t make the money any more you might as well make the gold and silver.

    Reply

  18. Rick simovitz May 12, 2017

    Absolutely further downside coming

    Reply

  19. Patricia J Atchison May 12, 2017

    Should 8get out of gold & silver now. Then when its at low point biy back in?

    Reply

  20. terry shead May 13, 2017

    If you are shoving millions of naked shorts into the market, what do you think, but in a minute there is going to be some one on the end, that will f–k the gangster bankers right up?

    Reply

    • tomkatz66 May 15, 2017

      Mike: You definitely need larger and clearer Charts in your presentations. In many cases your readers come up with their own conclusions. Some are right on. My guess is that we are going lower. I am very thankful for Larry’s Efforts, and thank you for your follow up on his work.

      Reply

  21. Will June 14, 2017

    This article is out of date and not very good at 20-20 hindsight.

    Reply

  22. Jim Kelly July 11, 2017

    If You say Gold Prices are dropping, then BUY DUST – the Gold Bear ETF. If you say Gold Prices are Rising, then, BUY NUGT !!! Check it out. Alternate back and forth based on Larry’s Chart. You wont be rich but you will not be depressed.

    Reply