Top Story

Gold Miners Could Shine In The Current Trading Environment

We’re keeping a close eye on the ratio between gold miners ETF (GDX) against gold (XAU). We can see on the weekly chart that gold miners are trying to outperform the underlying metal, after hitting a major low in late 2016. Whilst the ratio corrected between the 2016 peak and 2018 low, bullish momentum is again turning higher. It’s worth noting that the ratio began to rise in 2016 when investors were concerned of a global slowdown, and that we find ourselves in similar conditions today. If the ratio is to rise (so gold miners outperform gold) at a similar pace to 2016, the ratio could rise to its highest level since 2012.


Traders who think the ratio is due to rise could consider a pairs-trade, and initiate a long GDX (VanEck Vectors Gold Miners DFT/CFD) and short gold. Alternatively, gold bugs could look to trade some of the equities within the index. Here we’ve listed the top 10 constituents by weight along with year to date performance.


Agnico-Eagle Mines closed at a near 8-year high on Friday and has clearly broken out of compression. The 10-day eMA is currently acting as support, and the 10, 20 and 50-day eMA’s all point high in ‘bullish order’ to show momentum is gaining traction.

  • Near-term support sits around 60.10 to 60.63, so traders could seek to buy dips above this level.
  • However, the trend remains bullish above the 57 low, so we could also consider long opportunities above this support zone if we see a retracement first.
  • As we don’t see major resistance until the 73 high, bulls could keep an open target.


Kinross Gold Corp CFD has broken out of a corrective channel and appears poised to break above the 5.17 high. The correction stalled just shy of the 50% retracement level and found support around the 10 and 20-day eMA’s. Price action is almost a mirror image of the GDX/XAU ratio so, if the ratio is to rise further, it could bode well for this stock.

  • Bulls could seek to buy dips above 4.81 and anticipate a break above 5.17, to target the 5.82 high.
  • A clear break below 4.58 places the idea onto the back burner, although technically the trend remains bullish above the 3.94 low.


Related analysis:
The Gold/Silver Ratio Could Pay Handsomely In Silver
Copper's H&S Top Doesn't Bode Well For Miners | Anglo American In Focus


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

The markets are moving. Stop missing out.

Open an Account