Australian Investment Blog

How we intend to play Gold from here… Commodities tumbled last night as we’d predicted over recent weeks with Gold -2.2%, Oil -3.2%, Iron Ore -5.7% and Copper -2.5%. Obviously like all market calls we may ultimately be proven wrong but while prices unfold as expected "plans" need to be prepared to profit from these movements. Ultimately we believe this gold weakness will create some excellent buying opportunities but at this stage we continue to believe the banks will be the best performing sector in May, and perhaps June. Our main concern remains with the health of the iron ore and copper sectors however we believe Gold has an exciting 12 months ahead. Gold has rallied US258/oz (24.6%) from its lows of December 2015, topping out last week. Our current view is this initial advance is complete and gold will now undergo a significant correction to this year's gains and we will be looking to buy this retracement if it unfolds. Last night gold ETF's in the US were down over 6% and it will be interesting to see if this weakness continues locally. At this point in time the US1200/oz area is the ideal area to buy - see chart 1. Gold Weekly Chart