Gold has had a strong 48 hours since finding support in the low $1230s Wednesday morning:

On the daily chart we can even see a technical breakout from the recent consolidation, however, the gold miners $GDX (top of chart below) $GDXJ (bottom of chart below) are not making new highs and have actually traded slightly lower over the last couple of weeks as gold has continued to grind higher:

Since February 8th gold is up nearly 1% while the GDX is down 4.69% and GDXJ is down 3%:

What gives? Why are the gold miners stuck in neutral while gold is breaking higher above key technical levels ($1250)?

There are a couple of answers to this question. First of all, the recent underpformance likely has a lot to do with the outperformance we saw in the gold miners beginning at the mid-December lows:

Since December 16th GDXJ is up 44.32% and GDX is up 28.09% while gold is up 10% (as of yesterday's close) over the same time frame. Periods of outperformance give way to periods of underperformance and vice versa.

Markets go through cycles and equity investors also try to get a step or two ahead of what might happen next. If the outperformance of the gold miners from the December low until early February was a bullish indication for gold and precious metals then what does the recent weakness tell us? 

With gold coming up against some big price memory and technical confluence between $1260-$1280 and the miners beginning to act heavy, it may be time to temper our enthusiasm and prepare for a longer period of consolidation. It's definitely not time to chase rallies, and patience is likely to be rewarded much more handsomely than impetuousness.

Oh, and March is arguably the worst month of the year for the yellow metal historically...

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