Gold silver and precious metal (PM) stocks staged a major breakout yesterday as the dollar cratered to signal the onset of a major devaluation as its loss of reserve currency status becomes a physical reality. The BRICS are set to introduce an alternative CBDC related gold backed currency of their own that should drive the last nail into the dollar’s coffin. This has been “in the works” for quite a while and this being so it only is surprising that it has taken the dollar this long to break down. We saw all this coming a couple of weeks ago in the article PM SECTOR update – REVERSING TO UPSIDE and the two larger gold stocks featured in the article, Royal Gold and Victoria Gold have soared.
Anyway, the point is that the PM sector – and commodities generally – are embarking on a long and powerful upleg that is still in its earliest stages and this being so you can basically put on a blindfold and throw darts at a list of PM stocks and pick winners although of course we will strive to do somewhat better than that.
Now we will proceed to look at a range of charts showing the dollar breakdown and the PM sector breakouts yesterday that I am confident will “make your day” if you are long the PM sector…
We’ll start with the dollar which is of course the cause of the PM sector breakouts yesterday. The dollar cratered yesterday with a breathtaking 1.2% drop in the dollar index which broke it down from the bear Pennant it has been stuck in since late January.…
Meanwhile, the Canadian dollar, in common with many other currencies, broke higher against the US dollar yesterday, although as we can see, it had already started to break higher against the US dollar by the middle of last month. The Canadian economy is much more resource-based than the US and advancing metals prices should have a beneficial effect. Investors in Canadian mining stocks can therefore expect an additional benefit from relative currency appreciation, relative because all currencies are depreciating in real terms, if not against each other…
On gold’s 1-year chart we can see a quite lovely breakout yesterday from the corrective bullish Falling Wedge that brought it back to an important buy spot at the lower boundary of its larger uptrend channel and as we can clearly see, there is ample upside back up to the top of this channel – and there is nothing to say that, given the enormity of what is going on in the world, that it won’t in due course proceed to accelerate out of the top of this channel…
Silver had a big breakout yesterday too and although its uptrend is not yet as strong as gold’s as its larger uptrend channel is converging, it will probably proceed to rectify this in time by busting out of the top of this channel…
The chart for GDX (PM stocks) not surpringly looks very similar to gold and we can expect a robust by the sector as gold advances. Don’t worry about it having risen a lot yesterday – this chart shows that it has much further to go.
The chart for the Canadian dollar looks strong too, like it is breaking out upside from a long period of consolidation. Its chart will be added to this article later today, so look out for that.
Incidentally there are a string of big white candles in James Turk’s GoldMoney’s chart (XAU.TSX) over the past week, suggesting that investors of piling into physical gold.
Amongst stocks looking good this morning that we will be looking at ASAP are Sierra Madre Gold and Silver Ltd. (SM:TSX.V) that has positive news out this morning and Spey Resources Corp. (SPEY:CSE; SPEYF:OTC; 2JS:FRA) is at a very good entry point too. Away from the PM sector Muscle Maker Inc. (GRIL:NASDAQ) put in a reversal candle at strong support yesterday and looks set to advance.
Posted at 9.30 am EDT on 13th July 23 on CliveMaund.com.
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The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.
