GDX has been on a rally which many think was a major bottom as the above analyst thinks gold is going to $3000 soon. What these crazy forecasts are telling us is that the US dollar has to implode in a major way, before gold ever breaks out again. The 2011 peak was already a gold/silver mania peak which I documented very well. At that 2011 peak, the majority of analysts were all extremely bullish yet gold stocks imploded ignoring all the fundamentals. Most people couldn’t tell you what caused the decline after 2011, and I bet they still can’t tell you what lifted GDX in early 2016!
Sure GDX formed a bottom and it even has a decent “C” wave decline, but that doesn’t mean that GDX is in a real bull market! In a 4-year + decline, gold stocks had many rallies and they all resumed their larger bearish trends. It may take the rest of this month, but any new bottom will help make my bearish case. The US dollar is in a bull market that very few understand, as the US dollar bull market represents “deflation” not inflation. Any emotional gold buying moves will never last as they are not based on sentiment, but based on fear! Gold investors will run like chickens if this bottom does not hold.
The Gold/Gdx ratio is not all that bad at 66.54:1, but this ratio should expand much more before gold stocks become very cheap again.