Gold Miners Staging Breakouts (GDX, AU, GOLD, RGLD, ABX, AUY, GG, NEM)

Gold has been making a serious comeback and many are talking about the $1,000 per ounce level again as being ahead shortly.  This latest run is with energy prices screaming, the US Dollar getting pounded again, and with the fears that all this new money being printed is going to create much higher inflation down the road.  When gold was making the same sort of run to $1,000 earlier this year, that was because of the fear premium.  The other difference is that in this move, we are now starting to see a technical break-out on the charts of some of the top gold miners that trade in the U.S. that are actually global operations.  The Market Vectors Gold Miners ETF (NYSE: GDX) was up 4% at $44.45 in early trading, and its 52-week trading range is $15.83 to $51.84.  Two gold stocks are making key break-outs: AngloGold Ashanti Ltd. (NYSE: AU) and Randgold Resources Limited (NASDAQ: GOLD).  Other large gold mining leaders are lagging, but you have to wonder how long that will last if the stock market stays strong and if the interest in the re-flation trade stays high.

Barrick Gold Corporation (NYSE: ABX) is the biggest component of the Gold Miners ETF, and it is the farthest off of its 52-week high.  While shares are up over 3% at $38.45, its 52-week range is $$17.27 to $52.48.  Yamana Gold, Inc. (NYSE: AUY) is also lagging.  Even with a 3.5% gain to $11.52 today, its 52-week trading range is $3.31 to $17.00.  Goldcorp Inc. (NYSE: GG) is another large component in the gold miners ETF, and with a near-3% gain to $39.80 it is still well under its top-range with a 52-week range of $13.84 to $52.65.  Even with a 2% gain in Newmont Mining Corp. (NYSE: NEM) to $48.59, its shares are under the highs as its 52-week range is $21.17 to $53.77.

AngloGold Ashanti Ltd. (NYSE: AU) is one of the top components in this ETF and its shares are up over 3% at $42.14; the 52-week trading range WAS $13.37 to $40.98.

Randgold Resources Limited (NASDAQ:GOLD) is trading up 2.5% at $71.65; its 52-week trading range is $22.28 to $70.46.

Royal Gold Inc. (NASDAQ: RGLD) is more of a royalty company, but it has very much of a cult following.  This is trading up 1.3% at $46.45 this morning and its 52-week range is $22.75 to $49.81.

Whether this run is justified or whether it has run too much is one thing.  But if it lasts, we’d be looking for some of the leaders in the sector with underperforming stocks to play the big catch-up game in the sector.

Jon C. Ogg
May 29, 2009