Gold Miners Are Signaling Caution For The Gold Bull

By Robert Sinn September 07, 2011: 10:52 AM ET

(The Stock Sage) -- I have been bullish on gold for nearly a decade and continue to believe we will see $2,000/ounce and eventually even $3,000/ounce. However, there are some warning signs popping up over the last 24 hours which give me pause in the short term. Yesterday I counted at least six talking heads on CNBC proclaiming that gold was one of their only long positions other than cash. Whenever there is such overwhelming consensus among the punditry it is time to rethink things and question whether the 'group think' may be getting a bit overdone.

The main cause for concern lies in the charts, take a look at the Gold Miner's ETF $GDX on two different time frames, daily and weekly:

 

 

The gold miners have always demonstrated themselves to be a powerful leading indicator of gold itself. Right now they are signaling for gold bulls to be cautious. Gold ($GC_F, $GLD) has repeatedly rejected the 1900 level and looks headed down to trend line support around 1770, below that gold may be headed to retest the 1700 level which held brilliantly two weeks ago:

 

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