Gold powered up over $US50/oz overnight, taking it within striking distance of another fresh all-time high. The MM roadmap for gold has remained in play for many months; hence, while we remain positive in the medium term, the next ~10% swing could easily be on the downside, especially as the bullish rhetoric gathers momentum in the press – yesterday saw Goldman Sachs Group Inc. raised its year-end gold target to $US3,100 an ounce on central-bank buying and inflows into bullion-backed exchange, a likely contributor to the overnight move.
ASX gold miners were mainly lower on Monday, even as the precious metal traded ~$US2,910 an ounce. Northern Star fell 1.9%, and Evolution dipped 0.8%. However, last night’s strong move by precious metals and a ~1% advance by gold ETFs in the US should see the sector return to the winner’s enclosure this morning.
- Our preferred scenario is gold tests the psychological $US3,000 area in the coming month (s), but we wouldn’t chase such strength.
MM is now neutral gold short-term
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