Gold Stocks Bounce Off Support for August 21, 2006

The range on the XAU, which tracks a selection of gold and silver stocks, bounced off that trendline support that was shown in this chart. When a direction is finally established, hold on to the stocks in that sector, as they’ll probably take a nice ride. XAU over 150 resistance should clear the way for higher stock prices. A break of the trendline support would be a fourth test and breakdown which would make the short sellers happy. You can see the energy building on this weekly XAU chart of the gold sector.

This GDX chart shows a nice gap higher. Unfortuantely the last GDX trade was closed out.

GLG, Glamis Gold Ltd. and AEM, Agnico-Eagle Mines Ltd. are two nice gold stock traders. LIHRY, Lihir Gold Ltd. can be added to that list too.