The golds buffs would have loved the Australian gold stocks dominating the leaders board yesterday, it hasn’t been a common occurrence over recent times i.e. basically 50% of the ASX200 best performing stocks had a major gold influence. This year has been tough on precious metals as both interest rates and the $US have rallied strongly, the worst possible combination for the likes of gold and silver.
The Greenback recently garnered a huge amount of press as it broke out to fresh 20-year highs, good news for some traders but definitely not for manufacturers looking to export. With negative headwinds such as the $US we feel that golds doing ok but regaining the $US2000/oz does now feel like a big ask however in line with our pullback / consolidation view towards US bond yields MM does believe the next $US100 is far more likely on the upside albeit in a choppy corrective manner.
Interestingly gold has traded sideways in a consolidation pattern for the last 2-years and we’re only $US50 away from the $US1900 mid-point. The often financially rewarding phrase “don’t fight the tape” comes to mind i.e. if golds happy to trade between $US1675 and $US2075 don’t try and be a hero by forecasting the next meaningful move.
MM is mildly bullish gold around $US1850/oz
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