Daily Price Action
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XAUUSD Hints at Next Leg Higher for Gold and Miners Alike

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XAUUSD (gold) looks ready to break higher.

The sideways consolidation since topping out in August is indicative of another leg higher.

This is a local top, not a cyclical one.

Of course, that’s just my opinion, but XAUUSD is holding up incredibly well, considering it was trading at $1,450 just seven months ago.

Even the daily time frame continues to look bullish.

XAUUSD daily time frame

The biggest challenge with XAUUSD, or any spot metal, is that US traders are banned from trading it.

Yes, that includes me.

However, one of my favorite ways to play gold strength is via the gold miners.

More specifically, the junior miners.

I like the junior mining space simply because of the asymmetry of the risk to reward tradeoff.

For that reason, I’ve been long the junior gold miners since April 1st.

It’s a play I’ve been telling DPA members about since I first bought into the miners, and a portfolio that is still up over 100% since then.

But you don’t have to be a seasoned stock picker to know which companies to buy.

You can always buy the GDXJ, which is the junior gold mining index.

The same goes for the non-junior miners, which is the GDX.

The way you configure your portfolio and whether you invest in gold at all is entirely up to you, as always.

Investing in the gold mining space is just one way to take advantage of XAUUSD strength, especially if you live in a country where spot metals are banned.

However, it is my favorite way to play gold strength, particularly if you have a longer time horizon.

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GDXJ daily time frame

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13 comments
Justin Bennett says

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Deepak says

Thank you for analysis

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    Justin Bennett says

    You’re welcome.

    Reply
Khaleeq Ur Rehman says

Thank you sir I always wait for updates especially Gold

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Dino Wu says

Why are American traders prohibited from trading gold?

Reply
    Justin Bennett says

    Dodd-Frank Act following the 2008 financial crisis.

    Reply
Wolls says

Hi Justin, thank you for your fx updates. Please why are US traders banned from trading gold?

Reply
    Justin Bennett says

    We aren’t banned from trading gold. We’re banned from spot metals and commodities because of the Dodd-Frank Act.

    Technically speaking, it’s the brokers that are banned from offering it here in the states.

    Reply
saliman says

Great analysis, i’ve been waiting for that bullish move and i hope it happens within this week or this month. The RSI on the monthly time frame has that space to bull up, and moreover the last two monthly candles closed in bearish which am very optimistic that this month candle will close bullish.

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Hans Hammer says

Hi Justin, I have been following all your posting for quite a while now. It looks like Gold is falling after rejection 1917.08 and looks like a pin par on the Daily Time frame. Well i might be wrong , as always it’s just an opinion. You’re the expert 🙂

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    Justin Bennett says

    A pin bar is a very small piece of the puzzle.

    Reply
Olusegun Isaac says

Yes,that is very correct Bull in Gold often corresponding to rise in Gold mining stocks like GDX, GDXJ and falling dollar, Also,from wave angle Gold seems to be building 1-2 base now we are expecting wave 3 up However, Sentiment seems to be weighning against it

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