Newmont Mining shares experienced a discouraging break on their chart today, falling sharply despite only a modest fall in the price of gold. As can be seen below, the trend line for the recent rally has been broken, so it seems a period of consolidation is ahead of us. If NEM shares reversed today's loss on higher volume, the situation would change, but given its tedious failure to break above resistance in the upper $47s, my expectations are not high.
The weakness was not limited to Newmont. Gold shares in general fell about 2.5%. An explanation for the weakness eludes me. The underlying metal seems poised for a move higher, and if anything, the turmoil in Thailand, while not directly pertinent to world markets, should have at least reminded people that very real risks lurk in our financial systems. I guess no one remembers 1998, but then again, most hedge fund managers were in high school back then.
Apart from the slippage in gold miners, the action was rather staid. Silver coughed up another percent, and equities were modestly lower.
Disclosure: Long NEM, NEM Calls