Here is a little snippet from NFTRH 213 that showed the important indicator of gold sector health, the HUI-Gold Ratio (HGR) from three different views; daily, weekly and monthly. As you can see, daily must hold to keep the weekly intact, which in turn must hold to keep the monthly big picture of the secular bull (for the HUI, not this sad looking ratio) intact.
This is a difficult sector to own and indeed these charts say it is best to trade the stocks regardless of what one does or does not do with the bullion. But the conclusion is that until the HGR breaks down to a lower low, the current situation is viewed as a buying opportunity. On the other hand, HGR will serve as a handy risk management indicator if it should unexpectedly collapse.
Daily HUI-Gold Ratio (HGR) needs to hold a higher low to both the May and July lows here or else the story is bearish. That is because a new low here would threaten the higher low from Armageddon ’08, highlighted in yellow....Let's go to the charts [click here].
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