Gold just recently rose to a new closing high! Gold mining shares are following, breaking above short-term resistance levels, validating gold’s up-move, observes Omar Ayales, resource sector expert and editor of Gold Charts R Us.
Interestingly, the lock-down unwind is also feeding animal spirits; it’s fueling inflation expectations. The new force driving demand for gold may have shifted from safe haven to inflation expectations, while speculation grows that hyperinflation will erode the purchasing power of global currencies.
Our indicators suggest that gold could clearly surpass the resistance level — currently identified at $1785. The combination of a strong gold price and a strong stock market allows gold shares to thrive.
I’m now going to tip toe back into gold shares. I’m buying a bit of Kirkland Lake Gold (KL) at market. It’s one of the miners that has been kept down most since they announced the acquisition of Detour Gold.
KL is in a position to rise with strength in a renewed up move in gold. It’s jumping above its Mar uptrend confirming support. The stock has a first resistance at $44. A break above this level would confirm strength and propel Kirkland to the year long highs near $50.
I’m also adding two other gold shares, with entry levels at lower price points. We don’t want to be too aggressive in the event gold’s breakout ends up being a fake.
One of my longtime favorites is Agnico Eagle Mines (AEM). It’s a great senior miner with a stellar management team. Moreover, AEM’s price movement tends to be strongly correlated to gold’s.
Agnico Eagle is looking strong above the Mar uptrend near $58. Buy on a dip below $60. If it holds above support, The stock could rise to its recent high near $70 initially.
Another company I like is B2 Gold (BTG). It’s a Canadian miner, with great assets and management, and with tons of cash. It’s also held up stronger than most gold miners and it looks poised to rise together with gold.
As with other gold miners, it’s holding up above the March uptrend, showing upside potential. Buy some on a dip to the lower $5 level.