Peter Goodburn of Elliott Wave analysts, Wavetrack International, comments on the latest breakthrough in the dollar gold price as signifying the end of major counter trend declines in gold and silver. Base metals such as copper are also due for a similar take-off.
Time necessitates this most urgent update of mining stock performance of the last few trading days. Last Friday’s punch higher for many of the mining ETFs, indices and equites broke key overhead resistance levels that now confirms the November/December ’14 lows as the finalising levels of the multi-year counter-trend declines that began from the 2008/09 and 2011 highs. This also confirms gold and silver bullion have also ended major counter-trend declines that began from the highs in year-2011 at the Nov/Dec.’14 lows of 1131.85 and 14.51 respectively.
Last year’s forecasts had projected the GDX down to 15.90 with the Nov.’14 low recording just a fraction higher at 16.45 – see fig #1.
The XAU was forecast down to 60.60 with the Nov.’14 low ending again, slightly higher at 61.39 – see fig #2.
Various gold and silver miners, for example, Newmont Mining was forecast lower, towards 18.07 with the mid-December ’14 low recording a low at 17.60 – many other equities being tracked in our portfolio are also confirming a major directional change has occurred, confirming a new multi-year bull market uptrend has begun.
Gold bullion is still in its early stages of upward development and although we expect an upside test towards the old but key resistance level of 1525.00+/- in the months ahead, there is some shorter-term resistance overhead now that prices have today traded above 1300.00+/-. See fig #3.
Silver was already confirmed as ending its entire counter-trend decline that began from 49.91 last December at 14.51, the morning after the Swiss referendum result. But recent action has distilled this bullish forecast with the early stages of a multi-year uptrend underway with forecasts into new record highs – see fig #4.
Meanwhile, Copper made headline news last week with prices plunging into a new 5-year low, but in doing so, key downside levels forecast last year have now been tested towards 5575 (US$ tonne) with a little room to do a fraction more towards 5090 if needed. But the key message here is that base metals are hot on the tracks of the precious metals sector in confirming a reversal of trend – see fig #5.
We conclude with one of the major industrial/base metals mining companies, BHP-Billiton – see fig #6. Throughout last year, we had forecast a large percentage decline for this equity based upon the ongoing development of a counter-trend zig zag pattern that was pulling prices lower from the April ’11 high of 2653.50. Prices were hit during the last several months, dropping by over -40% per cent from the July ’14 reaction high. A low traded last week at 1247.50 and by every account, slightly above idealised measurements to 1201.50 – despite this however, the following action is confirming a major low at 1247.50 has formed, ending the entire pattern from April ’11 and validating our bullish forecast for a new bull market uptrend in its early stages of development.