There are also slight signs emerging that the GDXJ/GDX ratio is turning for the better. When the GDXJ/GDX ratio is falling, the former is weakening even more rapidly than the latter. That is to say given the volatility inherent in the junior miners, if the group takes a leadership role in boosting the broader gold miners complex, the effect would likely trickle down to GDX as well.
The GDXJ/GDX ratio does not command the same attention as other financial market ratios, but lack of popularity does not diminish the ratio’s potency. If the GDXJ/GDX ratio is successful in establishing support and then breaking out, it would be a positive sign for both ETFs, particularly if GDXJ legitimately leads its senior counterpart higher. [Comparing Two Gold Miners ETFs for Big Results]
Chart Courtesy: Kimble Charting Solutions
At the fundamental level, gold miners should also start to see some bottom line benefit from lower oil prices. Barrick Gold (NYSE: ABX), the world’s largest gold miner and the second-largest holding in GDX at 11% of the ETF’s weight, could save up to $25 per ounce of gold produced thanks to lower diesel prices, according to Bullion Vault.
Tom Lydon’s clients own shares of GLD.