The last time I wrote a title like the above was on June 19th; and wouldn’t you know that the correction ended the very next trading day? The consolidation breakout on Monday, June 22 created the gap you will see as a downside objective on the daily chart of HUI below.
Gold Sector Correction is Maturing (6.19.20)
That was a routine correction as gold and the gold miners were still part of one big relief party as central banks flooded the markets with liquidity to meet the deflationary crisis of the virus-ridden spring.
This time as you can see gold has disconnected from the party (as, obviously, have gold stocks), which continues on its merry way. Some gold bugs may cry foul but what is actually going on is that the normal recipients of cyclical inflation are getting bid as the US dollar declines (inverse USD shown here, rises). If there is an accident along the way to the recovery (or at least the Banana Republic) we will be reminded yet again ‘why gold?’.
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