A “Double” Sell Signal May Be Bad News for Gold

These double sell signals happen rarely, and this one may be a bad sign for the gold stocks. [Jeff Clark's Market Minute]( A “Double” Sell Signal May Be Bad News for Gold By Jeff Clark, editor, Market Minute The Bullish Percent Index for the Gold Sector (BPGDM) just generated a “double” sell-signal. Sell signals are rare for this indicator – occurring once or twice each year. Double sell signals are even less frequent. That happens only about once every two years. And it’s a bad sign for the gold stocks. Regular readers know the BPGDM generated [its first sell signal of 2024 last month](. Since then, not much has happened in the gold sector. The Gold Bugs Index (HUI) dipped a bit, rallied a bit, and then dipped a bit again. HUI closed Wednesday at 272 – just about the same level at which it was trading one month ago. In the meantime, the BPGDM rallied to a higher high – indicating an even more overbought and over-extended condition in the gold sector. And it recently turned lower again – generating a double sell signal. Recommended Link [Buy this AI Stock Before Elon’s Announcement]( [image]( Hurry… Elon Musk has promised that he “will share more information [about this AI project]( over the next couple of weeks.” If he mentions the name of this supplier in a press conference, there’s no telling how high shares could go. [Click here now before it’s too late.]( -- A Rare “Double Sell” Signal Returns The last time this happened was back in 2022. Gold stocks started the year with a fantastic rally. HUI gained 30% in the first two months of the year. That created an extended, extremely overbought condition. And, when the Bullish Percent Index for the gold sector (BPGDM) turned lower in March, it generated the first sell signal of 2022. HUI fell over the next few days – dropping from 318 to 300. But the gold stocks started rallying again. The BPGDM turned higher – thereby negating the sell signal. And HUI blasted to a higher high above 330. One month later, the BPGDM generated its second sell signal of 2022 – or we can call it a rare “double” sell signal. This time, the sell signal stuck. And HUI plummeted 25% in just one month. By the time the gold sector bottomed in September, HUI was trading at 180. That’s a 40% drop in six months. The setup today looks similar to the setup back then. The BPGDM just generated a double-sell signal. Take a look… [(Click here to expand image)]( Look at how similar the current action is to the action in 2022. Not only do we have a rare double-sell signal from the BPGDM. We’re also we are entering a seasonally weak period for the gold sector. HUI often declines from early summer into the fall. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. A Decline Could Be Likely Of course, none of this guarantees that the gold stocks are going to decline. Nothing in the financial markets is ever guaranteed. But, if we’re playing the odds, it seems to me the chances of a decline over the next several weeks are far greater than the chances for a rally. And, that decline could get started with the FOMC interest rate decision next Wednesday. You see, part of the reason gold and gold stocks have been so strong this year is due to the belief the FOMC will soon begin to lower interest rates. A falling interest rate environment tends to be bullish for gold. And investors have been buying the gold stocks in anticipation of rate cuts. If the Fed says anything next Wednesday that causes investors to doubt that expectation, then gold stocks are set to decline. And, if the BPGDM double sell signal plays out anything like it did in 2022, traders will have a much better opportunity to buy into the gold sector a few months from now. Best regards and good trading, [Signature] Jeff Clark Editor, Market Minute [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](