China leading the way?It does not matter what CNBC and other news are saying that recovery hope increase after data show China 32.9% investment increase from 30.5% on urban area's fixed assets like Apartments and Roads. The fact here is Oil and base materials like copper will remain strong.
Gold on the other hand will remain weak at least for the rest of this week....mind you if you look at GDX, MACD already crossed to the downside, a sell signal for Gold miners, short term indicators are near oversold so I expect bottom is near but it doesn't mean they'll bounce right off it, MACD still has to work things out...I expect sideways for a while after hitting bottom....So SG HGU buy target of 11.20 is very possible.
As for those who are holding miners for Long term, there is nothing to worry about, US Dollar is still in LT downtrend...nothing has changed, US dollar index needs to close above 92 before I start to review the LT charts again.
I understand there are many out there who are excited about China, Russia, India and Brazil in talks to replace the US Dollars as reserve currency with a basket of currencies but bear in mind, it is not in their best interest to see Dollar fallen into the cliff within a short period of time either, they hold too much and won't be able to find buyers in time if they rock the boat themselves....I think what they are doing is try to limit the inflow of Dollars with other currencies instead.
In the meantime, Copper seems to be a better play and you should have some as well.