|
Murray Coleman of Barrons
interviewed us in regards to the current situation in the metals and
shares:
Gold and silver futures finished on Friday at their lowest levels in
six weeks.
At the same time, popular ETFs investing in mining stocks closed
higher on the week. That’s prompting some analysts to predict that the
longer-term pattern of miners outperforming metals might be returning.
“There seems to be a divergence taking place in which stocks
have been overly punished and are poised to grind through summer with
relative outperformance compared to metals,” said independent
analyst Jordan Roy-Byrne in
an interview.
Gold for August delivery finished down 1.3% at $1,482.60 an ounce
on the Comex, the lowest ending price for a
most-active contract since May 17. The contract fell 1.2% on the week.
The SPDR Gold ETF (GLD)
finished off by 0.7% on Friday.
Silver for September delivery also fell to its lowest level since
mid-May on Friday, dropping 3.2% to $33.705 an ounce. The iShares
Silver ETF (SLV)
fell 2.5%. The fund’s shares wound up with a 1.1% loss for the week.
The Market Vectors Gold Miners ETF (GDX)
slumped 1.6% to $53.74 a share while the Global X
Silver Miners ETF (SIL)
also fell 1.6% on the day.
GDX finished up 2.2% for the week and SIL closed ahead by 2.7%.
Optimism over Greece and a surprise rise in manufacturing took much of
the attraction away from gold and silver as safe-haven trades, say analysts.
“Gold and silver were on the slide today as safe-haven
investments were withdrawn,” traders at Sucden
Financial wrote in a note.
Barclays Capital wrote that the yellow metal may slide as low as
$1,460 to $1,470 before finding a base.
While agreeing that ETFs that buy metals and track spot prices might
face tougher sledding in the short-term, Roy-Byrne says
mining stocks are showing increasing relative strength.
Going forward, Roy-Byrne believes
miners have confirmed a bottom and are
consolidating. For GDX, he see support at $52 a
share with upper resistance at $55 a share.
“It’s a tight range, but we’re in the summer and
there has been a lot of liquidation of precious metals holdings in the past
six months,” said Roy-Byrne. ”There’s not a lot of
downside left over the next several months.”
Jordan Roy
Byrne
Trendsman.com
Jordan
Roy-Byrne, CMT is the editor and publisher of Trendsman.com. You can get a
free 14-day trial to his Gold/Silver service by clicking
here.
|
