The rally in Gold and gold mining stocks easily surpassed our expectations and targets. The strength has been far more than we anticipated. The gold stocks blew past their 200-day moving averages while Gold blew past $1300/oz. Now it is time to take a technical look and focus on the key support and resistance targets.
The strength of the rebound pushed the miners well beyond their 200-day moving averages and to their June and October highs. GDX is consolidating just below $24 while GDXJ is consolidating just below $35. If this consolidation turns into a correction then GDX and GDXJ could find support at their 200-day moving averages which are at $22.71 and $33.37 respectively. As you can see, should GDX and GDXJ be able to exceed recent peaks then they could rally towards important resistance levels. Those are $25.50 for GDX and $38 for GDXJ.
The rally has been just as strong in Gold as it surpassed resistance in the $1300-$1310/oz zone. Gold closed the week at $1322/oz. Should Gold pause or correct here then the sellers could push the market down to previous resistance but now current support at $1300-$1310/oz. Trendline resistance will come into play near $1340/oz while the 2016 and 2017 peaks would provide resistance in the $1350-$1370/oz zone.