A Knee-Jerk Reaction to Yellen

Precious metals and miners initially lurched higher in the face of apparently dovish commentary by Chair Yellen, just now. 

We know the metals and miners have been consolidating their prior rallies in recent weeks, and have yet to break to fresh higher. However, if the strength throughout the New York lunch hour holds into the rest of the session, it may very well embolden gold bugs to makes a push for a new leg higher on intermediate-term timeframe. 

Speaking of which, the weekly chart of GDX, the senior gold miner ETF, seen below, illustrates the fairly modest giveback compared to the size of the advance in the winter months. GDX has not yet retested its primary breakout at $17. And if that continues to be the case it should also add credence to the idea of a new leg higher coming in the metals and miners. 

Whether this type of price action is a function of the gold market front-running a loss of confidence in The Fed and Central Bankers, or instead is simply a reality of The Fed caring more about growth than inflation, remains to be seen.

For now, it is probably best not to get too caught up in either thesis and instead focus on whether the strength in the complex holds and builds into the rest of the week.