Good Morning!

Gold Stocks are peaking....for now.

Gold will follow. Maybe not immediately but eventually.

The next leg higher will be huge. 

But a medium to intermediate-term correction could be starting.

Follow below....

The best way to mitigate the risk of sector corrections is to buy the right companies and at reasonable prices.

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1) Gold Quarterly RSI

Has Gold's quarterly RSI ever been this strong, this early in a secular bull market? 

Yes, in 1973. Months ago I was looking at 1972. 

Then, Gold corrected 12% over 5 months but came within 3% of testing its 200-day moving average. 

This time, Gold corrected only 11% over +4 months. After the 1972 correction Gold exploded higher and nearly doubled in 5 months. 

Gold's quarterly RSI hit 86 in the middle of that move. 

1973 and 2006 are the best comps. Gold corrected 28% and 23% during each. 

However, Gold is in a much better position than both as its not as extended. 

Even if Gold were to blow-off to $4000, I don't think it corrects more than 20%.

2) Gold & 200-Day Moving Average

This weekly Gold chart plots the equivalent to the 200-day moving average. 

The vertical lines mark the tests of the 200-day moving average after breakouts. 

Unless Gold retests the breakout immediately (1978, 2009), then it always returns to the 200-day moving average. (It even did so after that sharp move in 1973). 

The 200-day moving average is at $3110 now but has begun to accelerate. 

It could reach $3500 before January. 

Whether this peak is coming within days or a few more weeks, the ensuing correction is EXTREMELY LIKELY to test the 200-day moving average. 

After the corrections in 1973 and 2006 here is how Gold performed: 

120% gain in 13 months and 75% gain in 18 months.

3) GDX New 52-Week Highs

This chart from @sentimentrader plots the new 52-week highs in GDX along with a 20-day moving average. 

The 20-dma of new highs is 39.7%! (It's the red horizontal line).

This dwarfs all of the other peaks in modern history. 

(And GDX looks like a rhino horn on its long-term chart). 

We will see more readings like this in this ongoing cyclical bull market. 

But this kind of reading always marks a temporary peak.

4) GDXJ New Highs

My GDXJ proprietary data only goes back to 2015. 

But the 20-day and 50-day exponential moving averages of new highs DWARF the numbers seen in 2016, 2019 and 2020.

The 20-day EMA of new highs is at 46%. The 2016, 2019, 2020 peaks were at 25%-30%.  

This is a breadth buying climax.

5) GDX & its 200-Day Moving Average

The chart below, also from sentimentrader.com, plots the percentage of GDX stocks above the 200-day moving average.

The moving average of that data is 100-days.

So the 100-day moving average of the percentage of GDX stocks above the 200-day moving average is 96%.

This is the second-highest in modern history. 

Summary

A peak in gold stocks is imminent. 

The new highs data is indicative of a very, very strong cyclical bull market. 

But extreme readings in this data mark temporary peaks. 

Gold has measured upside targets of $3750 and $3950. 

Gold Stocks have been leading and crushing Gold. It would make sense they peak first, ahead of Gold. 

An imminent peak in gold stocks does not preclude Gold from reaching $3750 or even $3950.

In TheDailyGold Premium....

TDG #952 was a 17-page update.

In this update we covered the top 5 stocks we do not own (yet).

One is a developer which has potential to cash flow $450 Million/yr at current margins in 2028.

Another is an earlier-stage developer, that, if acquired for its potential NPV (of its project) at $3000 Gold, could rise more than 4-fold.

(A subscriber brought this to our attention in a Q&A and the stock was even cheaper then).

Another is a stock that subscribers bought but simply ran away from us.

And these are good assets that don't need $3500 Gold to generate a strong return.

We will continue to uncover quality juniors trading at excellent values and sporting 5x potential over the next few years. 

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Thank you for reading.

I wish you all the best in 2025 and beyond.