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Once again, the gold sector is gearing up for a rally.
We made a similar prediction a few weeks ago. Back then, the gold stocks had been falling.
Investor sentiment (a contrary indicator) was pessimistic. And, the Bullish Percent Index for the gold sector (BPGDM) was languishing deep in oversold territory. It would generate a buy signal for the gold stocks once it turned higher.
We suggested traders should buy into the gold sector when that happened.
It didn’t take long. Just four trading days later, the BPGDM turned higher. Gold stocks responded with a sharp, sudden rally. The Gold Bugs Index (HUI) jumped 15% in one week.
Look at this chart of HUI…
The blue arrows point to the action following the three BPGDM buy signals we’ve seen so far in 2026. Each time, HUI popped higher – generating returns between 13% and 20% in two weeks or less.
Even though the gold stocks are down for the year, and they’re down significantly from their highs in late February, traders who bought the gold stocks each time the BPGDM flashed a buy signal could be sitting on large, cumulative gains.
This is important because the BPGDM just flashed another buy signal. Take a look…
As a reminder, the BPGDM measures the percentage of gold stocks that are trading in a bullish technical formation. It’s basically a gauge of overbought and oversold conditions.
Since it’s measured as a percentage, a bullish percent index can only reach as high as 100% or fall as low as zero.
Typically, a sector is extremely overbought when its bullish percent index rallies above 80%. It’s extremely oversold when it drops below 30%.
Trading signals are generated when the index reaches extreme levels, and then reverses. This just happened for the fourth time this year.
The three previous times generated fast profits for traders who bought gold stocks on the BPGDM buy signals. We have a chance to do so again, right now.
It’s likely the gold sector will be trading higher in the days to come.
Best regards and good trading,
Jeff Clark
Editor, Market Minute
P.S. In my beginner trading service, Jeff Clark Trader, we have a gold trade that’s currently up 40% in just five trading days. Go right here to learn more about this type of trade.