Morning Report Thursday 8 May 2014
***NAB Reports 1H cash profit of $3.15b and interim dividend of $0.99**
The Fed continues to support the US economy: negative for Gold
As Europe battles to stimulate some inflation, last night Janet Yellen stated "the Fed must continue to spur economic growth as indicators for inflation and employment remain far from the central banks goals". Interestingly, Yellen also said "while some areas of the equity markets show signs of over-valuations, the broad market hasn't developed a bubble". Not very bullish rhetoric in general for an organisation that clearly wants assets higher.
As most people know, inflation is usually the catalyst for a strong move in gold and hence last night, the precious metal fell $US19. This despite continued tensions between Russia and the Ukraine. After 5 years of massive economic stimulation pushing inflation, amazingly this has not materialised and may lead to the final sell off I am looking for in gold stocks prior to a buying opportunity. This may coincide with inflation finally raising its head = Be patient in buying.
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