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All charts and comments intended for education and discussion purposes only. No investment recommendations are being offered. Comments below related to this post are encouraged. | MON - Sector Strength | TUE - Interest Rates | WED - Market Sentiment | THU - Commodities & Currencies | FRI - Market Breadth | SAT - Bullish Percents | About |

The graph below shows a continued slow shift of commodities from their corrections under the moving average to a positive status as they break above the moving average.  The Dow Jones Gold Miners index and the Goldman Sachs Industrial Metals index both shifted above the moving average, and the strength of all these commodities is looking convincing.

The shift higher of gold miners means that the equities are finally starting to participate and follow the price of gold and silver which has been acting well.  Keep in mind, the XAU index still has considerable overhead resistance and still needs to break out before the all clear for this group is signaled.  The gold miners bullish percent still hasn't reversed to a column of X's, but if it does that will be another positive sign for the group.

Gold has broken above the retrace high of last July, and the sideways chart pattern since the peak in May is looking positive.  The XAU index has an overhead gap and a number of previous highs above the current price, but its sideways consolidation looks favorable as well.  The GOLD:XAU ratio does not look favorable yet as gold continues to lead and it is leadership by the XAU that will be convincing for investors of the gold and silver mining stocks.

Below is a chart of the Dow Jones US Gold miners discussed at the top of the post, and this shows the new break above the moving average.  The chart shows a recent higher low and a test of the 100 level which was resistance a number of times going back to 2004 and 2005.  A break above here would be a nice development.

Below is a long-term look at the price of gold which bottomed when the Fed started lowering interest rates but never reversed course when the Fed changed directions. This chart is important because it shows that gold is in an huge long-term bull market but also that current prices are extended from a long-term point of view.  Gold prices could drop to just above $500 and still be above the lower support line and within the uptrend.  So gold investors need to know there is some risk here despite the favorable near-term outlook.

Speaking of risks, the price of gasoline is starting to show signs of life again as it tests the underside of the moving average. The favorable seasonable period is approaching and the price is responding.   

One last chart, and it is a good one.  This is a very nice looking break out of a very interesting sub-industry with lots of future ahead.