Comments: The HUI may be in an ascending triangle, but it needs to maintain the short term trendline depicted above. Unfortunately, Dwali, the Indian holy day, is this Tuesday after which it is possible that the bid that has kept Gold prices stable in Asian trade may disappear for a while. Nevertheless, some geopolitical tensions are currently recurring which may help a bit to stem aggressive selling. This month is on target to be one of the bloodiest months in Iraq for U.S. troops, which is again drawing media attention back to that little quagmire in the making. The situations in Iran and North Korea remain unresolved, though I personally don't have very high hopes from North Korea as a gold investor at this stage.
Considering that Gold dropped almost $10 today, the HUI has been fairly resilient. I'd usually say that is a positive divergence heralding gold stock strength in the imminent future, however, in this case it's less clear. Barron's came out with a fairly bullish note on Newmont Mining over the weekend, noting that it's target of $75 to $80 that it came out with in July of this year is still quite reasonable. Accordingly, Newmont has been outperforming today, dragging the whole HUI higher, in which it is the largest component. So it's unclear whether the HUI is really positively diverging or whether one major component is pulling it higher on a positive report.
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