The following two year chart of GOEX (Global X Gold Explorers ETF) shows a textbook retest of previous resistance after a ~50% rally from May through August of this year:
GOEX (Daily - Two Year)
After a powerful ~50% rally in the span of three months, a ~20% correction has brought the mid-tier gold producers/developers that comprise the GOEX exchange-traded fund back to previous resistance which should now serve as support. Toss in a rising 200-day simple moving average and what could be interpreted to be a bull flag pattern over the last three months and we have a solid bullish buy setup with a clearly defined risk. If this is indeed a bullish setup then price should not fall below the $23 level (about 4% below Friday's closing price).
As per my recent conversation with legendary mining investor Ross Beaty, the mid-tiers are the place to be right now. Senior producers will need to replace reserves and they aren't having much exploration success of their own. This makes companies like Couer Mining, Continental Gold, and Premier Gold which comprise the GOEX all potentially attractive M&A targets over the coming years. Not only that but the mid-tiers on average are valued at much lower valuation multiples relative to their senior gold brethren.
The GOEX is a fairly illiquid ETF so I recommend reviewing this ETF's holdings and forming your own basket of mid-tier gold stocks. Another factor in favor of buying mid-tiers over the next couple of weeks are the seasonal tailwinds that will kick in once we say goodbye to November and enter December:
Since 2011, GOEX has averaged an 8.3% gain between the end of November and the end of February.
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