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Gold Stocks Lag the Breakout in Gold Prices

NEW YORK ( TheStreet) -- On Sept. 6, nearly a year ago, Comex gold traded to an all-time high of $1923.7, and then the bubble burst.

Gold on Sept. 26 tested an intra-day low at $1535.0, which was just above its 200-day simple moving average. A slightly lower low at $1523.9 was set on Dec. 29. The price rebounded to a 2012 high of $1792.7 on Feb. 28, but weakness since then took it back down to $1526.7 the Troy ounce on May 16.

On May 16, I correctly timed the bottom for gold in It's Time to Buy Gold for a Trade. More recently, I have been talking about gold stability influenced by my annual pivot at $1575.8.

I have been posting stories on Fridays covering the weekly closes and scenarios for the U.S. capital markets, including gold, and reported that the weekly chart for gold became positive on Friday, July 27. My initial upside targets were my semiannual pivot and risky level at $1643.3 and $1702.5. Gold is within this range this morning.

On Wednesday, gold closed above its 200-day simple moving average at $1649.1 for the first time since March 27, and the breakout continued this morning with a intra-day high at $1669.5.

So today, I focus on "buy and trade" strategies for gold stocks, which lag their 200-day simple moving averages. I also profile SPDR Gold Trust (GLD), which is a cost-efficient way to trade the market for physical gold. GLD tracks gold futures better, as it closed Wednesday above its 200-day simple moving average at $160.25.

Reading the Table

OV / UN Valued -- The stocks with a red number are undervalued by the percentage shown. Those with a black number are overvalued by that percentage, according to ValuEngine.

VE Rating - A 1-Engine rating is a strong sell, a 2-Engine rating is a sell, a 3-Engine rating is a hold, a 4-Engine rating is a buy and a 5-Engine rating is a strong buy.

Last 12-Month Return (%) - Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.
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GLD $122.90 1.30%
GFI $4.54 3.70%
HMY $3.62 2.50%
KGC $5.47 5.80%
ABX $18.46 5.20%


Chart of I:DJI
DOW 17,709.85 -120.91 -0.68%
S&P 500 2,064.99 -10.82 -0.52%
NASDAQ 4,777.2430 -28.0480 -0.58%

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