When was the last time anything good happened to Alcatel-Lucent, S.A. (NYSE: ALU)? It has been a while.  With a contract win, with the highlights around its patents, and with the highlight around speedier web traffic, this one rose on a down day.  In fact, Alcatel-Lucent was up 4.7% a $1.55 on the day with less than an hour until the closing bell.

Gold was down big earlier as investors are liquidating everything for a source of liquidity.  So what are gold miners rising handily?  Market Vectors Gold Miners ETF (AMEX: GDX) is the go-to ETF for gold mining stocks and offers a great basket of the major global gold players.  This ETF was up 3.6% at $44.10 against a 52-week range of $39.08 to $66.98.  We just highlighted the value and huge upside that the components offer here.

Patriot Coal Corporation (NYSE: PCX) is in trouble and its viability is in question,  Still, yesterday’s news of working with Blackstone trumped a credit rating downgrade today.  The coal player was up 21% at $2.65 on more than 19 million shares as of the end of the day.

Rosetta Genomics Ltd. (NASDAQ: ROSG) has continued its post-reverse-split surge  and this is up almost 400% from the start of last week.  This is continued buying pressure after Medicare coverage came out.  Even a small capital raise has been ignored.  Shares are up another 37% at $10.23 and the post-split adjusted 52-week range is $1.40 to $36.45.

School Specialty Inc. (NASDAQ: SCHS) is surging simply on a debt refinancing.  That is not your usual rally tool, but the move here is massive. Shares were up 23% at $3.00 in the last hour of trading and the 52-week range is $2.15 to $15.84.

JON C. OGG

At issue may be a stock market stabilization, or perhaps it is a stabilization aimed solely at the commodities and those companies which profit from either the rise of commodity prices or the rise of the demand for those commodities. It was just yesterday evening that Dennis Gartman of the Gartman Letter was talking up gold miners as his method of choice to play the current bounce in gold.

To show just how much implied upside there is we found some large cap gold stocks that have upside of about 100% and many of the big players have implied upside of well over 50%.  The key ETFs for these miners show just how widespread the damage was during the last sell-off.  The Market Vectors Gold Miners ETF (AMEX: GDX) trades at $43.35 against a 52-week trading range of $39.08 to $66.98 and that is down about 35% as a group from the highs.  The Global X Silver Miners ETF (AMEX: SIL) trades at $18.00 against a 52-week range of $16.54 to $29.05 and that is down almost 38% from its high in the last year.

We included the implied dividend yields but due to foreign issues and ADRs causing currency translations and due to some payouts not being quarter like U.S. companies do, we would urge you to only consider the dividend as a footnote and something you should be verifying on your own.  Besides that, who buys gold (and silver) miners because of their dividend yields only?

We have evaluated the following large-cap gold stocks: Barrick Gold Corporation (NYSE: ABX); Goldcorp Inc. (NYSE: GG); Newmont Mining Corp. (NYSE: NEM); AngloGold Ashanti Ltd. (NYSE: AU); Kinross Gold Corporation (NYSE: KGC); Agnico-Eagle Mines Ltd. (NYSE: AEM); Gold Fields Ltd. (NYSE: GFI); Yamana Gold, Inc. (NYSE: AUY); IAMGOLD Corp. (NYSE: IAG); Harmony Gold Mining Co. Ltd. (NYSE: HMY); Eldorado Gold Corp. (NYSE: EGO); and Royal Gold, Inc. (NASDAQ: RGLD). We have covered also two of the larger silver players of Silver Wheaton Corp. (NYSE: SLW) and Pan American Silver Corp. (NASDAQ: PAAS).

Barrick Gold Corporation (NYSE: ABX) traded at $37.60 and has a market value of $37.6 billion.  The consensus target price from Thomson Reuters is $59.10 and the 52-week range is $34.82 to $55.95.  Barrick has a dividend yield of 2.2%. The implied upside to the consensus target: 57% but we would note that the target is above the 52-week high.

Goldcorp Inc. (NYSE: GG) traded at $34.90 with a market value of $28.2 billion.  The consensus target price from Thomson Reuters is $60.42 and the 52-week trading range is $32.16 to $56.31.  Goldcorp’s most recent yield was listed as 1.6%. The implied upside to the consensus target is 73% but we would note that the consensus target is still above the 52-week high.

As you may have expected, gold demand actually shrank in the first quarter of 2012 according to this gold data and the drop was down 5% from the high demands of the first quarter in 2011.

The decrease in gold demand was expected due to import taxes in India and high gold prices, but what is interesting is that gold’s demand value was up 16% year over year. The figure was put at $59.7 billion globally and the Council noted an average gold price up 22% year over year to $1,690.57 for the quarter.

The issue that helped support gold were increased demand in China, as well as continued central bank purchases, and inflows into exchange-traded funds.

China’s investment and jewellery demand reached 255.2 tonnes, up 10% on the previous year’s levels, and China accounted for 30% of the global jewelry demand.  Conversely, jewelry demand was down 19% in India, with Indian investment demand down a whopping 46%.  The World Gold Council predicts that China will become the largest source of demand for gold in 2012.

Central bank buying was 80.8 tonnes with purchasing gains in Russia and Kazakhstan.  Mexico was the largest addition with a single purchase of 16.8 tonnes.

Demand from ETFs and other investment products was 51.4 tonnes worth about $2.8 billion.  The SPDR Gold Shares (AMEX: GLD) site lists that it holds 1,276.6 tonnes with a total value of just over $63.5 billion as of May 17.

Market Vectors Gold Miners ETF (AMEX: GDX) measures the companies which explore and mine the world’s new gold.  Shares are up almost 4% at $41.11 after bottoming out just above $39.00 over the last two days but this mining ETF was actually up at $50.00 as recently as April 2.

JON C. OGG

The charts have turned ugly for gold and silver and it bleeds right back to what Carter Worth of Oppenheimer said in mid-March about gold going back to $1,500.00.  Our take is that gold is currently suffering from identity crisis: it is not an inflationary nor a dollar hedge, nor is it proving to be the risk-on asset that investors, traders and speculators had been hoping it was.

Today’s prices on gold and silver matter if you are a pure chartist.  If the prices fail to hold here, gold has another $100 or so in downside and silver could see another 10% easily come out of its still-elevated price.  The iShares Silver Trust (NYSE: SLV) and the SPDR Gold Shares (NYSE: GLD) are experiencing different forms of chart failures right now.

The Gold Trust failed its 50-day short-term test last month and it has now been proving to fail on its 200-day moving average test for the longer-term outlook.  If the GLD does not get a bounce soon, there could be dead air down to $152 or so before technical buyers start sniffing again.

Be sure to see the Stockcharts.com charts below.  The Silver Trust failed its 200-day for longer-term investors back at the end of February and the beginning of March, but its short-term chart was failing at the 50-day moving average back to mid-March.  If this Silver Trust share closes under $30 and hangs out there for long, there is really a bunch of dead air down to $28 or even $27 before technical buyers will start sniffing.

Before you think that the end will never come, Kitco’s Allen Sykora noted today in a longer presentation, “analysts and traders suspect that the market will find some kind of footing before long.”  As we always say, charts matter but they are often corrected by a whole host of excuses as to why they did not work in a particular instance.

The weakness in metals is turning the key gold shares into value traps rather than value stocks.  The $41+ billion dollar in value of Barrick Gold Corporation (NYSE: ABX) is even down 4% at $41.21 and that is $1.00 under its prior 52-week low.  A 4.3% drop in the Market Vectors Gold Miners ETF (NYSE: GDX) down to $46.65 is down $1.40 under its prior 52-week low of $48.05.  And silver is proving to be the devil’s metal for Silver Wheaton Corporation (NYSE: SLW) with a 4.2% drop to $31.30, but its 52-week low does not come into play until $25.84.

This is a difficult time to play a chartist in gold and silver.  The underlying theme is that both metals are weak and could get much weaker.  We usually prefer more fundamental analysis and the fundamental analysis is not supportive either.  If no more easing measures are going to be invented, then the dollar’s rise against the Euro will only help put pressure on gold and other commodities.  And more specifically, investors as of today are not able to successfully claim that gold is a hedge asset nor that it is a risk-on asset worth buying.

Stay tuned.  Maybe silver is not the only devil’s metal.

JON C. OGG

Chart provided by Stockcharts.com:

And sometimes, gold just trades around its charts.  Yesterday we showed how many of the key gold mining stocks were trading at 52-week lows and were starting to look like bargains for patient investors.

Carter Worth of Oppenheimer was on CNBC Thursday night offering some price action in gold by reading the charts.  When it came to gold, Mr. Worth gave a one-word summary that leaves no room for interpretation: “Terrible!”  Worth talked about the 150-day moving average turning down and awful relative strength.  His target as of now: $1,500 on gold.

With it being late on Friday, gold is down about $1.90 per ounce at $1,655.40, so Worth sees another 10% drop in the price of gold.  While he talked about hedging with miners, a 10% drop in gold would likely not help out the Market Vectors Gold Miners ETF (NYSE: GDX) even if it is up $0.05 at $50.19 on a day when gold is down.  If the gold market does go back down to $1,500 per ounce, the same corresponding move would be expected in the SPDR Gold Trust (NYSE: GLD) and it is down 0.3% at $160.80 today.

JON C. OGG

Barrick Gold Corporation (NYSE: ABX) is up 1.2% at $43.84, but its 52-week trading range is $42.50 to $55.95.  The market value is still almost $44 billion.  Goldcorp Incorporated (NYSE: GG) is up only $0.03 at $44.48 but its 52-week trading range is $41.91 to $56.31.  Goldcorp is still worth nearly $36 billion today.  Newmont Mining Corporation (NYSE: NEM) is down around $54.15 after a $0.15 drop on Thursday and the 52-week trading range is $50.16 to $72.42.  It is still worth more than $26 billion and it has a 2.6% dividend yield.

To show that these large players are not alone, the Market Vectors Gold Miners ETF (NYSE: GDX) is up 0.5% at $50.34 but the 52-week trading range is $49.22 to $66.98.

Gold itself is up almost 1% at $1658.90, but that is down from about $1,780 at the end of February and down from above $1,700.00 just last week.  If you just look at gold via the SPDR Gold Trust (NYSE: GLD), it is up 1% at $161.30 and the 52-week range is $136.25 to $185.85.  The “GLD” is at an important juncture on its chart if you take a look at the stockcharts.com chart below.

JON C. OGG

iShares MSCI Global Agriculture Producers Fund (NYSE: VEGI) targets the front end of the production chain (fertilizers or agricultural materials) while excluding exposure from companies at the end of the production chain (packaging and marketing). This is a bit similar to but nowhere near identical to the Market Vectors Agribusiness ETF (NYSE: MOO).
 
iShares MSCI Global Energy Producers Fund (NYSE: FILL) tracks the MSCI ACWI Select Energy Producers Investable Market Index.  This is similar to the ProShares Ultra Oil & Gas (NYSE: DIG), but without the leverage.

iShares MSCI Global Select Metals & Mining Producers Fund (NYSE: PICK) aims to track the MSCI ACWI Select Metals & Mining Producers Ex Gold & Silver Investable Market Index. This one is not identical to but has overlaps with the SPDR S&P Metals & Mining ETF (NYSE: XME).

iShares MSCI Global Gold Miners Fund (NYSE: RING) aims to track the MSCI ACWI Select Gold Miners Investable Market Index.  We consider this an alternative to the Market Vectors Gold Miners ETF (NYSE: GDX).

iShares MSCI Global Silver Miners Fund (NYSE: SLVP) aims to track the MSCI ACWI Select Silver Miners Investable Market Index.  We would consider its an alternative to the Global X Silver Miners ETF (NYSE: SIL).

As far as why these are different from some other ‘production’ ETFs, iShares explains that these include only companies at, or near, the initial phase of production of the commodity. Investors can target the front end of the production chain instead of including the back-end of the production chain to focus on the aspects more sensitive to fluctuations in the underlying commodity price.  Companies further down the production cycle are impacted by a number of factors in addition to commodity prices.

An ETF for just about anything… now competing ETFs for many more strategies.

JON C. OGG

Silver Wheaton Corporation (NYSE: SLW) is up 6.7% at $34.07, and the 52-week trading range is $25.84 to $47.60.

Pan American Silver Corp. (NASDAQ: PAAS) is still only flat at $21.85 but it was lower before the FOMC comments today. The 52-week trading range is $19.93 to $43.06.

Goldcorp Incorporated (NYSE: GG) is up 5.2% at $46.70, and the 52-week trading range is $39.93 to $56.31.

Newmont Mining Corporation (NYSE: NEM) is up 3.4% at $59.43, and the 52-week trading range is $50.05 to $72.42.

Kinross Gold Corporation (NYSE: KGC) up over 6% at $11.23, and the 52-week trading range is $9.96 to $18.25.

Agnico-Eagle Mines Limited (NYSE: AEM) up 8% at $37.23, and the 52-week trading range is $34.36 to $76.49.

ETFs are rocking as well.  The Market Vectors Gold Miners ETF (NYSE: GDX) is up 5.3% at $54.58 against a 52-week range of $49.22 to $66.98.  Market Vectors Junior Gold Miners (NYSE: GDXJ) is up 6.5% at $28.66 against a 52-week range of $22.58 to $42.97.  The Global X Silver Miners ETF (NYSE: SIL) is up 3.9% at $23.69 and the 52-week range is $19.05 to $31.34.

The logic is simple enough… This signals extremely low interest rates and low costs of borrowing.  It also signals that investors will have to look elsewhere yet again to seek higher returns than short-term and intermediate-term Treasuries.  As this means that rates will be low in the U.S. for longer than expected, that is going to drive a weak dollar policy as long as things remain static in Europe and in other major economic zones.  That is the perfect storm for gold and silver as they are often inversely correlated to the dollar.

JON C. OGG

After taking a look at the “GLD” chart the concerns are growing.  Since its major move at the end of 2008 there had not been a single time that the SPDR Gold Trust shares had violated the key 200-day moving average.  If you look at the mining ETF via the Market Vectors Gold Miners ETF (NYSE: GDX), the gold bulls may argue that the mining sector violated the 200-day moving average on multiple occasions and still traded higher!  Some technicians may watch other metrics on the GLD for long-term trends but many will fear that this means that the monstrous run higher at a minimum cannot recover at the same pace.  Other technicians may argue that gold has peaked outright, just like Dennis Gartman has raised concern about recently.

It is at least somewhat interesting that Goldman Sachs recently lowered the ratings of AngloGold Ashanti Ltd. (NYSE: AU) as well as Randgold Resources Limited (NASDAQ: GOLD) this morning, both were downgraded to “Sell” from an already cautious “Neutral” rating. AngloGold is somehow up almost 1% at $41.52 today and Rangold is down 0.3% at $101.50.  Meanwhile, Barrick Gold Corporation (NYSE: ABX) was recently raised to “Sector Outperform” from “Sector Perform” by Scotia Capital.

What is so confusing for many gold bugs and investors alike is that the news headlines would make you think that gold has everything going for it.  Iran flexing its muscle… The Euro Zone debt crisis… The possibility that the Euro disappears or is altered… Sovereign debt credit rating downgrades… China’s central bank buying gold… Uncertainty… and more.  It is the rise of the U.S. Dollar again that is capping gold’s positive aspects.  Besides that, gold reached the point that many market participants just cannot afford to use the metal for anything now. 

If you go back to the “GLD” as the measurement for most spot gold investors today, that would be $157.36 as to where the 200-day moving average is now versus $154.90 after a 0.2% drop today.  The “GLD” chart below from stockcharts.com shows a 3-year history for our readers.

JON C. OGG

A snapshot from Kitco shows that spot gold is down $33.90 or -1.95% at $1709.20.  The SPDR Gold Shares (NYSE: GLD) is trading down 1.9% at $166.20 so far today.  In dollar terms, this has gold challenging a floor put in just two days ago but the stock on a longer-term basis of the last three months shows that gold could just as easily rise or fall from here in the coming days. The stockcharts.com chart on the SPDR Gold (see below) shows a different story where the 50-day moving average is becoming a magnet.  For the GLD at $166.20, the 50-day moving average is $165.97.  Its key 200-day moving average is all the was down at $156.71.

The move today, along with the weak stock market today, is sending shares of the Market Vectors Gold Miners ETF (NYSE: GDX) down by 2.3% at $57.58.  As you might expect, the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) is more volatile and more leveraged since it deals with junior miners and it is down 4.3% at $28.59.

The Gabelli Global Gold, Natural Resources & Income Trust (NYSE: GGN) is down only 1.3% at $15.95 on the day.

Gold continues to trade with an identity crisis.  The dollar has become the safe haven now that gold has pulled back and likely because it is up so much from a year ago.  Gold could have traded even worse today and perhaps that 50-day moving average in the GLD is helping to keep it from getting much worse.

JON C. OGG