Reason For Caution In The Goldies Despite 52-week Highs

Many senior gold producers hit fresh 52-week highs early in today’s trading session. However, there are some early warning signs that the gold mining sector is beginning to experience some exhaustion. While the miners have continued to move higher, 3 of the last 4 trading sessions have seen many of the leading names in the sector open higher (or even at session highs) only to spend most of the trading session moving lower and in many cases closing near session lows.

This small cluster of ‘black candlesticks’ (and large bodied red candlesticks in some cases such as GG) coupled with momentum divergences (relative strength still below 70 as price makes new highs) and thinning volume offers a bearish context to a sector making 52-week highs. From my perch it’s not enough to turn outright bearish on the goldies, however, it certainly offers a reason for bulls to tighten stops and pay closer attention to the day-to-day action:

 

ABX (Daily)

ABX_Daily_6.13.2016

 

AEM (Daily)

AEM_Daily_6.13.2016

 

GG (Daily)

GG_Daily_6.13.2016

 

NEM (Daily)

NEM_Daily_6.13.2016

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