The Gold Miners ETF (GDX) is showing strong growth in a clear Elliott Wave pattern that started from the low point on October 28, 2025. This movement consists of five waves. Wave 1 peaked at $91.67, while Wave 2 corrected down to $83.22. Wave 2 has a double three corrective pattern. Wave ((w)) finished at $84.89, followed by a rise in wave ((x)) that concluded at $88.48, and wave ((y)) ended at $83.22, marking the close of Wave 2. Wave 3 began next, with wave ((i)) rising to $92.35 and wave ((ii)) correcting to $88.09.

Impulsive Wave Structure

The Index continued into wave ((iii)); wave (i) reached $91.23, and wave (ii) pulled back to $88.79. Wave (iii) is nearly finished, with a corrective wave (iv) expected to follow and then another rally in wave (v). In the short term, support at $83.22 is likely to attract buyers, while retracements will follow patterns of three, seven, or eleven swings. As the impulsive sequence moves forward, we expect further gains. Given the strong impulsive structure since the low on October 28, 2025, our outlook remains bullish. If you take long positions, use the wave 2 bottom at $83.22 as a crucial stop-loss level. If this price is breached, it would invalidate the current bullish outlook and require a reevaluation of the entire structure. This analysis indicates we are in a robust third wave, usually the most powerful and prolonged part of an impulse. We should be on the lookout for near-term dips, like the expected wave (iv) pullback, as chances to start or increase long positions. These pullbacks are ideal times to buy call options or sell put credit spreads with upcoming expirations.

Macroeconomic Factors and Market Conditions

This technical strength is backed by the broader economic landscape. The latest Consumer Price Index data from December 2025 showed core inflation at a surprising 3.4%, defying expectations of a smoother drop. This ongoing inflation increases gold’s attractiveness as a traditional hedge, benefiting miners directly. Additionally, we’ve seen the US Dollar Index (DXY) decline from its peak last November, dropping from 106.50 to about 103.20 now. This dollar weakness is a positive factor for gold prices, which are priced in dollars. Data from the World Gold Council also revealed that central banks continued significant gold purchases in the last quarter of 2025, reducing supply and providing price support. The current conditions in GDX resemble market movements from early 2023 when concerns over a central bank policy mistake triggered a sharp rise in precious metals. Now that the market anticipates a higher chance of a Fed rate cut by mid-2026 to support a slowing economy, the stage is set for further price increases. Therefore, using options to build bullish positions allows for leveraged exposure while keeping risk defined. As wave (iii) of ((iii)) seems to be almost complete, traders should wait patiently before making new moves. The best strategy is to look for the expected dip in wave (iv). This will prepare us to take advantage of the following rally in wave (v), which will complete the larger wave ((iii)) structure. Create your live VT Markets account and start trading now.

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