Alert: Market Divergence in Gold mining
Something significant is happening today, namely gold and silver mining stocks are diverging away from the rest of the market. In fact, mining stocks are up as of this writing around 5-6% ON AVERAGE! today while the rest of the market is flat to negative. This divergence means that something important is in the offing. Gold itself will probably soon break the $1000 per ounce challenge, I think since the gold stocks are doing better than the underlying metal. GDX is a diversified ETF of gold mining stocks (which I own) and is a good way to get in, but I would wait for a pause before rushing in. This divergence means that sometime soon, there is going to be another wave of downside in banking and the credit markets, and that may bring the gold sector down with it a little, but it will outperform the general markets. PM refers to Precious Metals such as gold, silver, platinum, palladium etc. and it looks as though they are all going to be making good moves here.
The divergence is a bit scary for other reasons, but let’s let the market tell us that instead of trying to guess. Gold can be bought through CEF or GLD, and Silver itself through the ETF SLV. Top mining stocks include GG, SSRI, and RGLD. I’ll write more on this sectorr if there is interest, please send me a comment!
