Gold Miners Enter Most Bullish Period of the Year

The gold miners as measured by GDX are up nearly 120% year to date as they enter what is the best two month period of the year for the sector historically. Using the NYSE/Arca Gold Bugs Index (HUI) we can see that the goldies have been up six consecutive years in the month of August for an average monthly gain of 7.0%:



Quite a streak and one that clearly stands out relative to the rest of the year. Moreover, going back 20 years we can see that August/September also stands out as the strongest two month period of the year with an average two month gain of 8.6%, and once again it’s easy to see that August stands out as an exceptionally bullish month:



After suffering a ~10% correction earlier in July the gold miners are poised to finish the month strong with a large bullish engulfing candlestick on the weekly chart:


GDX (Weekly)


The trajectory of the 2016 gold miners rally is simply impressive and although dips have been short lived, there have been dips which have served to shake out longs and build the wall of worry. Will this August make it 7 years in a row or are gold bulls in for a disappointment?

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