GLD hit a cycle bottom a week ago. My comments in the Week #28 in Review, on July 16, were appropriate.

"The Daily and Weekly data cycle high (443.70) and low (413.85) are now the same, which means that the gold market is ready for a break-out, in my view. I could be wrong (obviously!), but I feel that a trend line drawn over the recent cycle peaks indicates that an upside break-out is possible at about 437, within three weeks. I feel strongly that gold bullion is not going lower than the cycle low of 413.85, and will soon start to move higher to establish a new cycle high (i.e., above 443.70)."

Then last Saturday in the Week #29 in Review, I wrote:

"The $XAU closed this week at 93.18, up +3.43 pct W/W, which is very strong. The current price sits just below the M40 (94.94). It could be closing in on an upside breakout, or perhaps just pushing up to a resistance level before backing down again. I think the former. The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF, which trades under the ticker symbol TSE:XGD was up +3.59 pct W/W to 49.67. Excellent.

The M40 for XGD is now 50.16, so a small rally could easily overcome the technical resistance level. I have been telling you my thinking that XGD would take out the M40 in July. So far, a strong USD has been a deterrent, but now the China yuan and Malaysia ringitt have revalued higher against the former USD peg. That is a start to a currency readjustment that may see the USD fall some from here.

....This is the time to start getting involved if you are not."

This next chart reflects that I made an accurate short-term trend reversal call.

Now we have to see if $XAU and TSE_XGD can break through the resistance of their 40-Week Moving Averages. It was a long-shot, but I did call for that to happen in July, which is over tomorrow for trading purposes.

Unfortunately, this week the gold stocks have not been faring too well. The $XAU M40 is at 94.65, and the index has traded down to 90.89. The XGD M40 is 50.02 and the index has fallen back to 48.24.

What's happened here is that a couple of the goldminers have reported lower profits, basically on higher cost issues. Placer Dome (NYSE: PDG and TSX: PDG) is one of those.

PDG is off over -5 pct on the day, and -8 pct W/W. Any further weakness would lead me to call another buy on this stock.

This is an important time to be watching the goldminers closely.