Gold was the week’s worst-performing ASX-related commodity, falling almost 4% following the hot US CPI, reinforcing expectations that the Fed would keep rates higher for longer and raising the prospect of an outsized December rate hike, or another in January. The relationship is easy with higher interest rates increasing the opportunity cost of holding non-yielding gold, putting further pressure on prices. However, Australian gold producers held up reasonably well with Ramelius (RMS) and Evolution (EVN) even managing to eke out small gains.
- We believe the risk/reward favours the bulls around US$3,900/oz, but the trend is not our friend yet.
MM remains bullish toward gold around US$3,900/oz
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