Chart of the Day – Monday, August 19, 2024

Gold Stocks vs. S&P 500

Formed a bullish inverse head and shoulders bottoming pattern.

Based on my historical gold stock data going back 100 years, the Feb 2024 low was an all-time low. pic.twitter.com/BE5m7R5prV

— Jordan Roy-Byrne CMT, MFTA (@TheDailyGold) August 19, 2024

Today’s Chart of the Day was shared by Jordan Roy-Byrne (@TheDailyGold).

• Gold printed a fresh all-time high today after posting its first weekly close above $2,500/oz. last week. The yellow metal has outperformed the S&P 500 and its sectors this year, up more than +21% YTD.

• Gold Mining stocks ($GDX) have been lackluster over the years, but $GDX stood out last week, rising +7.4% to a two-year high. Jordan points out that $GDX looks ready to outshine the S&P 500 ($GDX/$SPX) after building an Inverted Head & Shoulders pattern over the past year.

• The “Head” of the pattern was formed six months ago after hitting an all-time low. The ratio made a higher-low in June, forming the “Right Shoulder.” If this long-term trend reverses, Gold Mining stocks could produce significant alpha in the coming years.

Takeaway: On a relative basis, Gold Mining Stocks ($GDX) have built a potential Head & Shoulders Bottom. If this bullish reversal pattern succeeds, prepare for Gold fever.