History repeats and today we have another panic day in the precious metals sector. The chart below shows GDX and gold price action, two hours before the closing:
As the chart shows, gold is down 0.8% while GDX is crashing 3.8% (and GDXJ is down 5.1%).
However, looking at 10-day price action, silver looks to be bottoming (while gold is not):
Note: gold is in red, silver is in black
Let us wait till the end of session.
O.K. The session is closed but the situation did not change significantly.
Let me show two charts.
The first chart shows the old relationships between gold and gold miners:
It looks like we are in the healthy correction mode where the basic relationship, GDXJ being stronger than GDX, is still intact.
Typically for a strong correction, during down days the volume is higher than that recorded during up days. However, note that the high volume during down days is going down. In my opinion, it may be another sign of the decreasing selling pressure.
Summing up - although there are signs of the dissipating selling pressure, we are still in the correction mode.