This young gold-stock upleg is accelerating, with fast-rising prices enticing in more capital. This sector has surged sharply to multiple major upside breakouts in recent weeks, which is starting to turn skeptics into believers. Despite their strong upside momentum being chased, gold-stock prices remain far from overbought levels warning of impending selloffs. This mounting upleg still has great room to power way higher.
Gold miners’ earnings are highly leveraged to prevailing gold prices, which drive this sector’s upleg and correction cycles. In early March as the last extended gold-stock correction was bottoming, I wrote an essay on gold’s momentum selloff. It concluded with “the gold-futures selling that ignited all this is finite, and is likely nearing exhaustion. After that, gold should rally hard.” We were positioned for a new upleg.