Summary
- After adding to my GDX positions near the September lows, the strong rally seen since then appears overdone, and I am no longer bullish.
- While rising gold prices and falling oil prices should support profitability, valuations are now expensive on most metrics.
- The rally in gold prices is out of line with trends seen in US real bond yields, suggesting the metal is the most overvalued it has been since August 2020.
- A gold price correction would kick the legs from under the GDX's rally, which is already overdone based on current gold prices.
For further details see:
GDX: Don't Get Greedy