Gold Stocks Overheated? 20% Correction Coming Says Technician

With a slow start to the year, many of the gold miners have now seen their shares rise massively in 2016.

Author:: Daniela Cambone
Publish date:: May 10, 2016 4:57 PM EDT

KITCO NEWS - With a slow start to the year, many of the gold miners have now seen their shares rise massively in 2016. So does a 83 percent rally in GDX (GDX) - Get Report since the end of 2015 show that perhaps things could be getting overheated? According to Jordan Roy-Byrne, the editor of The Daily Gold, after hitting a historically significant low in January, another short-term 20 percent correction for gold (GOLD) - Get Report miners is overdue. 'If it doesn't happen immediately, it will probably happen in the summer,' he told Kitco News Tuesday. 'But, other than that, I think people need to stay bullish on the miners.' The market technician said that investors need to remain patient. 'If you're looking to get in right now, wait for the sector to correct...there will be an opportunity or two in the coming months.'

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.