When Gold, Silver, and Copper All Tank… Are They All Devil’s Metals? (GLD, RGLD, SLV, HL, JJC, SCCO, FCX)

What happens when you have an appreciating dollar?  Commodity prices tend to fall, all other things being equal.  But what about when you have a scenario where risk-on investors are not buying these for growth and a time when defensive and inflation-wary investors are on the sidelines too?  It is a perfect storm for no buyers and it means that investors are going to have to turn to the charts more than ever to see when and where the pivot levels on these are.

SPDR Gold Shares (AMEX: GLD) is down 1.6% at $156.50 and challenging the absolute lows not seen since April 4, 2012.  Royal Gold, Inc. (NASDAQ: RGLD) has not held up since earnings and its shares are down almost 4% at $57.84 on the day against a 52-week range of $55.00 to $83.87.  Eldorado Gold Corporation (NYSE: EGO) is performing the worst of our tracked gold names with a drop of 5.3% at $12.14, and be advised that is a new 52-week low as the prior range was $12.44 to $22.12 over the last 52-weeks.

iShares Silver Trust (AMEX: SLV), the ETF tracking the true’ Devil’s Metal of silver, is down 2.2% at $28.56.  Silver Wheaton Corporation (NYSE: SLW) can always be counted on for volatility and its shares are down almost 3% at $26.65 against a 52-week range of $25.84 to $42.50. Hecla Mining Co. (NYSE: HL) remains very troubled and very challenged and shares are down again after earnings as revenue and earnings fell hard, despite it maintaining its normal dividend and announcing up to 20 million shares for a buyback plan with proceeds over the next 24 months.  Hecla shares are at a new 52-week low of $3.82 against a prior 52-week range of $3.87 to $8.82.

iPath DJ-UBS Copper Total Return Sub-Index ETN (AMEX: JJC) is down with copper as the anti-growth trade seems to still be winning.  Shares are down 2.1% at $47.00 against a 52-week range of $38.99 to $59.06.  Southern Copper Corp. (NYSE: SCCO) is down 2.2% at $31.50.  This is a drop due to the slowing growth of the emerging world on top of a slower Europe.

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) remains challenged and its shares are down 2.5% at $35.48 against a 52-week range of $28.85 to $56.78.

With the S&P 500 Index down 0.6% at $1360.00, the go-to assets for risk-on and for hiding out are not working.  With stocks lower it looks like investors are flocking to the safe haven of bonds for the “Sell in May and go away!” theme.  The 30-Year Treasury yield of 3.03% looks to be the lowest long bond yield since February 28, 2012.  The 10-Year Treasury is now yielding just under 1.85% and that appears to be the lows not seen since the start of this last February.

The stock chart from stockcharts.com below on the “GLD” should show you just how bad the gold charts are looking.  If those old lows do not hold, some technicians are going to be calling for a firmer end in the gold trade while other chartists will be telling you a major bounce is coming.

JON C. OGG