GOLD
There are conflicting views as to where the gold price goes from here. Given a weakening $USD and, as of last night, gold futures looking positive short term, is there any reason to think that the price is topping out at around $3,740?
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Answer
Hi David,
Gold is in a fascinating position at present:
- A weakening $US suggests a higher gold price.
- An aggressive US rate cutting cycle over the next 12-months should be bullish for gold.
However, both of these tailwinds are largely built into todays price with gold already trading at its all-time high ~$US2,525, MM’s target area through most of 2024. Hence we’ve lightened our exposure to the sector over recent weeks reducing our positions in Evolution (EVN) and Barrick Gold (GOLD US).
- ASX gold stocks have underperformed the precious metal hence we believe it’s prudent selling at least part of our holding (s) into strength. We are bullish medium term, but more cautious in the short term and the consensus is very bullish on gold right now.
