Equities And The US Dollar Stabilize, Gold Tumbles - What I See Next
Gold miners are two week weeks into a solid correction that has seen many stocks tumble 20%+ from their highs
So far, I view the precious metals & gold mining sector correction of the last two weeks as being of the garden variety. Nothing out of the ordinary, and certainly to be expected given the magnitude of the moves since the beginning of the year.
At its April 21st high, the GDX was up more than 50% YTD and gold was up more than 30% YTD - these are breathtaking moves that should not be taken lightly.
One of the things that I always find interesting about market corrections is that if I had told you in January that gold would be above $3,200 on May 1st, you’d probably have been impressed and viewed that as a bullish sign. However, now that gold has dropped ~$300/oz in the last ten days (yet still above $3,200/oz) sentiment has turned negative on the yellow metal and gold miners.
So it is, so it will always be.
After declining ~11% since April 21st, the GDX is nearly into an important zone of previous resistance that should now serve as new support.
GDX (Daily)
The $45.50-$46 zone is first support (360-370 in the HUI Gold Bugs Index), followed by a much bigger level down near $43.
Another important phenomenon of the 2025 stock market environment is how quickly sentiment changes. Over the span of a few days the narrative can transition from wild euphoria to fear and pessimism. We have seen such a transition over the last week in precious metals and miners. While I can’t say that we’ve reached catastrophic pessimism yet, the negativity is certainly palpable already.
Three individual gold miner chart setups that are on my radar if this correction deepens:
IAG (Daily)
The mid-tier gold producers tend to have the greatest torque as the gold bull market transitions to the optimism and enthusiasm stages. IAMGOLD (NYSE:IAG) has already had a phenomenal bull market run over the last three years, rising from $1.00 per share in 2022 to more than $8 per share last month. 2025 stands to be a transformative year characterized by substantial production growth. IAG reports earnings next week (May 6th) and the recent ~20% correction may be presenting an attractive entry point ahead of the Q1 earnings report.
NEM (Daily)
The world’s largest gold producer, Newmont (NYSE:NEM), delivered a strong Q1 2025 earnings report. However, the gold price is the #1 driver of NEM shares. If you believe in the gold bull, the ~$49 level is an attractive spot to add some NEM.
WDO.TO (Daily)
Wesdome (TSX:WDO) is a high-grade, high-margin Canadian gold producer. WDO reports Q1 earnings on May 13th, but the market already knows that Q1 production was strong. The C$15.00 level is an attractive entry point after a standard ~20% correction from a new all-time high at C$18.95 per share.
I believe that the most important chart to focus on is the weekly chart of EUR/USD; at the same time that gold reached $3,500, the #1 most liquid FX pair got wildly overextended up near $1.1600:
EUR/USD (Weekly)
After a 1400 pip rally since January, it’s logical that EUR/USD retraces 300-400 pips and retests major long-term support/resistance near $1.11-$1.12. Upon a successful retest of the $1.11/$1.12 zone in EUR/USD, I believe the gold miners will find strong support and resume their uptrend.
The bearish fundamentals for the US dollar remain fully intact, the short USD trade simply became too crowded. Some stabilization in FX markets is ultimately healthier for the long term gold bull thesis. I know I’d rather not see a complete collapse of the global financial system just yet.
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