U.S. Gold (UXG) Showing Strength With Results From El Gallo
Precious metals appear to be quite bullish in reaction to the financial troubles in Europe. Out of all the commodities during this European debt crisis gold has shown to be king as a currency and during the past few days as equity markets sold off small juniors have shown the ability to withstand a market correction and thrive during this crisis.
U.S. Gold is showing impressive relative strength to the overall market and I expect to see it outperfor the overall market. UXG is one of the most aggressive drillers in Mexico and has been steadily reporting impressive results of their new major silver discovery.
The chart appears to be quite strong and a move above $3.50 will bring more institutional support and clear major resistance. The 50 day moving average crossed the 200 day and both are moving higher. They will act as support as UXG is making a series of higher highs and higher lows. Notice the high volume sell off and how it bounced off the 50 day moving average. $3 seems to be support.
I expect a move into new 52 week highs.
Disclosure: I personally own shares of UXG.