Gold miners are relaxing from an impressive thrust (by SentimenTrader)

Gold and gold stocks have got a great run in the past few weeks, so much so that they have gone a bit ahead of themselves. Anyone chasing hot trends are usually getting killed, especially if they are too aggressive. Right now, we are seeing a good dose of correction for precious metals, which may continue for a while. Nevertheless, I don't think the uptrend for it has completed already and I still think there is a good chance we will see a lot more upside for gold to go after the current correction is done. I'll be buying more when the moment comes.  *****************************************************************************************

Gold has had a tough time over the past week and is already trading down to a two-month low. There isn't a perfect correlation between gold and the companies that mine it, but miners tend to move along with the price of gold. Due to what had been an excellent multi-month run, the percentage of gold miners trading above their 200-day moving average surged above 90% last week before pulling back in recent sessions. During structural bear markets, it's rare to see thrusts like this, but this is the 3rd one since 2018. Extreme cycles in long-term trends have led to outstanding long-term returns for mining stocks over the past 40 years.

What the research tells us

Earlier this year, fewer than 10% of gold mining stocks were trading above their 200-day moving averages. That surged to more than 90% by last week Similar cycles from one extreme to the other tended to precede long-term gains in miners Gold prices also tended to rally