NVDA’s signal for stocks and precious metals

(www.investorideas.com Newswire)

Was that a hit? Very possible. More importantly, even if it wasn’t a top, it’s likely we’ll get one soon given what the stock is doing.

And above all: what are the previous leaders doing? For now, let’s look at the metals and miners.

They are all lower today and GDXJ is even (temporarily) down more than 2%. That is remarkable, but not yet groundbreaking. What becomes game-changing is gold’s performance and the denial of the move above $4,600.

I quote yesterday’s
Warn:

Gold stopped at its rising resistance line and is moving back and forth around the $4,600 level. Will it confirm the breakout above USD 4,600 and USD 4,500?I think an invalidation is still the likely outcomenow that the dust appears to have settled on the recent attack on Fed independence.

$4,600 failure. Probably $4,500 will follow.

Silver tooHowever, with a decline of more than 5%, silver did not negate any move above its previous high. Technically, the white precious metal is still in a stronger position.

Dollar finds support

Meanwhile, the USD Index has reached a higher level of its rising support lines and is already rising again. The uptrend remains intact and sooner or later other markets will be affected by it.

As I wrote yesterday, this could happen to a greater extent when the USDX is above 100 – until that happens, most traders will view the USD situation as unclear.

Still, I want to emphasize today that if the overall stock market slumps, the same will likely happen to gold, silver (temporarily, but still), and mining stocks.

On a standalone basis, the situation in the shares is somewhat problematic. Yes, the
S&P500invalidated its move above the 2025 high, but there were so many attempts that we might as well see another one next week.

That’s not where the problem lies.

However, when we zoom out and look at what’s happening with previously market-leading stocks, it’s clear that a storm is brewing.

Tesla failed to do this at first
gold aboveit’s a 2024 high. Immediately after this debunking, I wrote that this was a strong sell signal, and since then we’ve seen another – a confirmed break below the rising dashed support line.

The latter is important because the first attempt to get underneath was declared invalid and was followed by a rally. Not this time. The glitch has been fully confirmed and Tesla appears ready to slide.

NVDA stops leading

While Tesla is important and attracted a lot of attention last year, it is even more important to monitor what happens with NVDA – investors’ AI darling.

And the thing is, that’s not the case anymore
perform better.

Conversely, it lags behind. In general, when leaders in any market are lagging, that market is likely preparing for a decline. This happens when early buyers exit because the stock is too expensive, and at the same time the general public invests in other companies that are cheaper – causing other stocks to temporarily outperform.

That’s exactly what seems to be happening with stocks right now.

It’s not just theory either. I’ve highlighted two other instances where NVDA’s top preceded the S&P 500’s top. The first was already after its top while S&P was moving higher. This did not last long and large declines followed.

This is important because if we get a bigger drop in prices, Prime Ministers and miners are likely to react. They reacted significantly in 2008 and 2020 – especially the silver and mining stocks.

Now,
Silver has several reasons to be resilient right now, but mining stocks can still fall deeply. And that’s exactly what I think is likely.

Thanks for reading today’s analysis. I appreciate you taking the time to dig deeper and reading the entire piece. If you want to know more (and additional details not available to 99% of investors), I invite you to stay tuned for our free analyzes –
Subscribe now to our free gold newsletter.

Thank you.

Przemyslaw K. Radomski, CFA
Founder
Golden Meadow®

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