Why Gold Could Be in for a Rough Fourth Quarter

I’m thinking maybe this time, after three small reactions, the sell-off in the gold sector will be larger. [Jeff Clark's Market Minute]( Why Gold Could Be in for a Rough Fourth Quarter By Jeff Clark, editor, Market Minute Maybe the fourth time will be the charm for BPGDM. The Gold Miners Bullish Percent Index (BPGDM) just triggered its fourth sell signal of 2024. The previous three signals were duds – yielding only small declines in the Gold Bugs Index (HUI) before gold stocks took off higher again. That’s unusual. The BPGDM has triggered reliable trading signals for the 15 or so years I’ve been following it. So, as tempting as it may be to toss this indicator out of my toolbox, I’m not willing to do that just yet. Look at this chart… [chart] [(Click here to expand image)]( In most cases, a sector is overbought – and subject to a correction – when its [Bullish Percent Index (BPI)]( rallies above 80 (meaning 80% of the stocks are trading in bullish technical patterns). Recommended Link [Market Uncertainty? Elon Musk’s Invention Might Be the Answer]( [image]( When you [click here and see what Elon Musk’s new invention does…]( And how it works… You may NOT believe it. You may tell yourself this is just science fiction. But Elon just tested this in a real human… And the result was mind-blowing. [Click here to see it.]( -- A sector is oversold when the BPI dips below 30. The BPI generates a buy signal when it turns higher from oversold conditions. We get sell signals when the BPI turns lower from overbought levels. The red arrows on the chart show the BPGDM sell signals so far this year. Here’s how the gold sector performed following the three previous sell signals… [chart] [(Click here to expand image)]( There’s not much to get excited about here. Gold stocks dipped a bit following the sell signals. But they quickly recovered and went on to rally to higher levels. Over the past four years, though, BPGDM sell signals led to declines of anywhere from 12% to 30%. So, I’m thinking maybe this time, after three small reactions, the sell-off in the gold sector will be larger. After all, the dollar looks like it’s ready to bounce. The Commitments of Traders report shows the “smart money” for the gold sector is short the largest amount of gold futures contracts in over a year. And retail investor enthusiasm (a contrarian indicator) for gold stocks is quite bullish. All of this suggests the gold sector could be in for a rough fourth quarter. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. For the record, I’m naturally averse to shorting gold and gold stocks. I’m much more comfortable leaning bullish on the sector. But when conditions line up as they are now, I’ll make short-term speculative short trades in the gold sector. Any strength in gold stocks in the coming days is a chance to add short exposure. Best regards and good trading, [Signature] Jeff Clark Editor, Market Minute [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](