So here comes the May update of the Favorites list. It will begin with an update on gold itself before going to watch carefully the miners. For this letter I introduce a new little favorite : B2Gold Corp. number 6 in the gold miners list.
At the end of these articles is listed the history of the article for those catching up in the middle and wishing the origins of one or an other of the listed mines.
- Gold - XAU (a small gold and general market update to begin)
- Metalla Royalty - MTA
- Kinross Gold Corp. - K
- K92 Mining Inc. - KNT
- Barrick Gold Corp. - ABX
- Newmont Corp. - NGT (NEM in the US)
- B2Gold Corp. - BTO
- Final word
Gold - XAU
As already discussed in previous articles, gold has been forming a massive cup formation during the last years, somehow announcing the coming of a monstrous crisis. Now the important question will be to know if it is going to form that handle that could be coherent with a short time economic recovery or if it will just continue hiking up.
On the shorter time unit gold performed a H&S formation and retested its level during the last three weeks. So will it climb to its objective or is it fainting it before the handle ?
Projections : to try to appreciate the movement it is important to bring gold in relation to major market indices.
I sent earlier last week on twitter a comparison between 1929, 2008 and today's crisis and here comes a little update. The correction movement may have ended with the breaking of the upward wedge on the daily term. So what does that mean for gold ? It means it may cancel the handle formation and directly climb in case economy fail to climb. But let's not forget that during the first leg down of the market every mine has followed during a week before climbing again, just an important information to keep in mind and not freak out too quickly.
So about those projections, I see here three possibilities based on the overall market and the H&S formation seen on the daily gold chart :
I let you chose the one you prefer, but in either case if you're a long term investor you shouldn't worry too much as the climb will come whatever happens. On the other hand traders may want to try to anticipate the handle. But I'd rather not to rather any feathers willing to play the game of small gains but just invest and go to sleep.
Metalla Royalty - MTA
On the weekly chart it may seems that we should expect a pull back to parallel channel basis and on the daily channel it never broke over the line initially drew and defined as the buy signal.
However, if gold finally pushes up I expect the weekly price to climb above a draw a higher upward channel.
Conclusion : buy signal stays the same in case of gold growth. Otherwise I would wait for the weekly channel basis to enter.
Kinross Gold Corp. - K
The monthly perspective begins well with last month closure way above the wedge. Objectives stay the same, first in sight is the Obj wedge M and then will follow the double bottom validation that should propel the price even higher. However looking at RSI (inside the red square) I expect a small correction coming during the next weeks.
However on the weekly and daily terms what we can see is a potential retest of the weekly dnw wedge objective before climbing up again for the bullish fanion objective. During the correction the price may fall back into the daily parallel channel, nothing bad, hold on !
Conclusion : buy zone is now for those still not inbound. Just in case of a gold correction causing a miners hesitation I would sell this one as a long term investor. Again traders may try to take the most benefit of it.
K92 Mining Inc. - KNT
I won't last too long on this one. Just appreciating the perfect rebound of the price on the monthly Kijun and also staying above EMA 9.
While we can appreciate a cup without handle on the weekly graph and only a retest of the cup level, there's still the possibility on the daily graph of a new correction with the newly designed wedge. However this wedge has been drawn during the first crisis leg. As we're expecting a second leg it may be possible that miners follow the movement and then this wedge will take all it sense. But we could also think we should ignore this signal and just wait for the descending trend line to be broken to indicate the new entry door.
Conclusion : as the descending trend line and the wedge share the same signal here things are easy and buy signal stay the same as earlier.
Barrick Gold Corp. - ABX
ABX images are quite clear and no need to explain much. Monthly shows a perfect break up the wedge while weekly price is just seeking its bullish flag/H&S objectives (they're the same here) and daily price just confirmed its H&S objective, retested it and is now following weekly objective.
Conclusion : buy and/or hold !
Newmont Corp. - NGT (NEM in the US)
Conclusion : nothing more to say than in the last letters for Newmont. Just hold and enjoy as it exactly followed the plan earlier drew !
B2Gold Corp. - BTO
Monthly price shows a perfect upward wedge with the price retesting it before strongly jumping. The objective of this upwd wedge sends the price +1000% higher to 49 CAD as it stands at 7,61 CAD today !
Weekly graph completes perfectly monthly objectives as it just jumped up a bullish flag with its objective standing half way to the monthly one. Perfect ladder to climb then.
Daily objectives look even better with one just passed last week (the dwn wedge D) and two others waiting above. Also the buy signal just rang as the price broke its objective, made a pause under the double top (red line) but didn't react down and took its ladder again.
Conclusion : buy zone is now for long term !
I have several times talked about the possibility of a gold correction during the next weeks and the miners to follow gold movement. Some things need to be kept in mind :
First it that a pull back will be seen in case gold fails to follow its daily H&S objective and it should be awaited in case the H&S neckline isn't hold during the next weeks. But this pull back will only be of short term, maybe a season no more. The time it needs to form that handle.
Second is that I often talked about the RSI showing overbought zones. I didn't enlightened it each time but we can see it in almost every mine today on the short term. But remember this quote whose no one could still identify the author yet :
The market can remain irrational longer than you can remain solvent.
If it is true in one sense, it is also in the other and in a bull market short term RSI often stays high as every investor want a part of it.
Whatever happens, I wouldn't worry much for gold and miners. As long as the crisis threaten our economy people will like to protect their assets and chose the reserve of value.
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In the next days will come two articles :
- Gold miners - The ones you want to keep an eye on [May update]
The following of the series about next gold miners opportunities whose last article is here.
- ETH & BTC update
Title is still not ready yet but it here will come the updated point of view on the crypto market.
Stay updated threw the different channels :
- Telegram channel
- Twitter where are shared my articles, those from my coworkers and other article I find very interesting
Previous editions of the Gold miners - Favorites list :
- April 2020 : Gold miners - Favorites list [April Update]
- March 2020 : Gold/Covid-19 - Good time to invest ?
- March 2020 : Gold miners - Is the crisis over on their side ?