Gold Miners: Is $0.01 A Lot? It Can Be

Especially when it’s a $0.01 that invalidates a major breakout. Then it becomes a major sell signal. We just saw that in the GDXJ.

A Penny That Shook the Market

That was the lowest close that we saw in two weeks, but the key thing about yesterday’s session is that it closed below the June high. Just $0.01 below it, but still – out of all the prices at which yesterday’s session could have ended – it was the price level that was below the previous high. This is important.

Of course, GDXJ (3.36%) declined more than GDX (2.58%), and this is likely to continue – even more so if the stock market finally declines. I’ve been expecting the latter to happen for quite some time – also based on tariffs’ impact on world trade, but now more and more experts agree that the time might have turned for stocks.

We’ll see. Miners’ technical picture favors significant declines, anyway, as the very long-term and very strong resistance was reached – 2011 high in case of the GDX and the 50% Fibonacci retracement based on the 2011 – 2016 decline in the GDXJ.

Again, while the general stock market might be topping here, even if it isn’t the case, miners are likely to decline, anyway, and there are reasons for it also beyond the technical situation in the miners themselves. And I don’t mean just the breakdowns in gold and silver, nor do I mean the sharp rally in platinum that happened without a good reason, and that was aligned with previous major tops.

What I want to add is that it’s all happening with very little support from the USD Index.

The latter moved up just a little yesterday, and overall, it’s still consolidating after the July breakout.

The RSI is back in the middle of its trading range, indicating that the USD is ready to move once again. And once that happens, miners are likely to fall hard. Please keep in mind that while the moves in the USDX and GDXJ were not always perfectly aligned – not on each day – eventually, they moved in the opposite directions. The upcoming rally in the USD Index is likely to trigger declines in the GDXJ. And both moves are likely to be significant.

It also seems that it’s about time (!) for the rally in the USD Index to start.

Echoes of 2008

There are quite a few analogies to 2008, including the fundamental issues. Back then, it was the real estate market in the U.S. that triggered the global recession. Now it could be the tariffs.

The thing is that back in 2008, the USD Index was bottoming for about 4 months before taking off – which triggered huge declines in the precious metals market and copper (as well as in FCX). FCX, other miners and silver were affected to the biggest extent.

The mid-April bottom was the first important low in the USD Index. That was… 4 months ago.

The history tends to rhyme, so it could be the case that the post-breakout consolidation is over or about to be over.

GDXJ’s tiny invalidation is yet another crack in the dam.

Finally, the SILJ that I featured yesterday declined during the session as well.

It’s obvious that the strong resistance held. This fits multiple other indications that all point to the same thing – bigger declines in mining stocks are to be expected here, not further rallies.

In other words, my gold price forecast for August 2025 remains bearish.

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