More good news: On a technical basis, it is clear the uptrend for ETFs like GDX is still intact. That bodes well for more upside for gold miners ETFs.
“Note that on the multiyear weekly chart, the GDX ETF’s sharp year-to-date rally has brought it back into a longer-term horizontal line of former support/resistance,” according to InvestorPlace. “As a reference point, this area in the low $30s is thus respect-worthy as it also coincides with the relative strength index (RSI) at the bottom of the chart in record ‘overbought’ territory.”
While gold miner stocks and sector-related exchange traded funds look cheap after underperforming broader equities for years, some caution investors against betting too heavily on this area of the market as the sector rallies on strengthening bullion prices.
SEE MORE: 31 Gold ETFs Investors Should Size Up
“After pulling back to the lower end of the channel the week before last, last week’s rally left a strong bullish reversal candle behind on the chart and now has the GDX right back at its early July highs. From here, all else being equal the path of least resistance for the GDX ETF points higher into the $32 – $33 area as a next upside target before better resistance may again come into play,” adds InvestorPlace.
For more information on the Gold ETFs, visit our Gold category.