Take Profits In Newcrest Mining

Posted on | by Todd | Leave a Comment on Take Profits In Newcrest Mining

On August 8th, Spot Gold posted a low during the New York session of $1254.00.

Overnight, the yellow metal posted a 10-month high of $1341.00, a 7% gain in less than a month.

Over the same period of time, Newcrest mining has rallied from $20.25 to post a high of $23.70 early in yesterday’s session. This move represents a bit less than a 17% gain.

Even though the heighten geopolitical tensions which have supported the Gold price are still very much a part of the market, technical momentum indicators are signalling that investors can expect a short-term correction lower.

We believe the medium-term price trajectory in Gold will remain intact after the overbought conditions are alleviated.

As such, we suggest taking profits today in NCM, along with the smaller Gold miners: EVN, SAR, NST and OGC.

Newcrest

RBA Meeting Highlights A Busy Data Week

Posted on | by Todd | Leave a Comment on RBA Meeting Highlights A Busy Data Week

It’s going to be a busy data week for the Aussie Dollar, which could lead to some increased trade activity in the AUD/USD. 

The schedule includes the RBA and Current Account data on Tuesday, followed by the quarterly GDP data on Wednesday, and then the Retail Sales and Trade Balance report on Thursday.

Any of these reports could put further downside pressure on the Aussie Dollar and return the pair below the .7800 level for the week

Investors looking to profit from the AUD/USD trading lower can look to buy the BetaShare ETF with the symbol: YANK.

YANK is an inverse ETF, which means the unit price increases as the price of the AUD/USD decreases.

YANK also has a 2.5% weighting, which means a 1% change in the AUD/USD will correspond to a 2.5% move in the unit price.

The current price of YANK is $12.70.

We calculate that when the AUD/USD trades back to the January low near .7300, the unit price will trade at $16.75.

BetaShare ETF Yank

 

Gold Jumps Higher On Heighten Tensions Over North Korea

Posted on | by Todd | Leave a Comment on Gold Jumps Higher On Heighten Tensions Over North Korea

Spot Gold has started the week close to a 10-month high of $1338.00 as North Korea’s test of a hydrogen bomb triggered the usual shift to safe haven assets, while stock futures are pointing to a lower day for global equities.

Local Gold stocks have opened higher with Newcrest posting a 4-month high of $23.78 in early trade.

With the US markets closed for Labor Day holiday, we could see some consolidation as technical levels now seem stretched.

Over the medium-term, we expect both the price of spot Gold and the local mining stocks to continue with an upward trajectory.

However, we do see near-term scope for a technical pullback in Newcrest to the $23.20 level, and to the $2.38 level in Evolution Mining.

Newcrest

Evolution Mining

 

US Jobs Outlook Weakens, Debt Ceiling Concerns Continue To Grow

Posted on | by Todd | Leave a Comment on US Jobs Outlook Weakens, Debt Ceiling Concerns Continue To Grow

There were no bright spots in yesterday’s US Payroll report.

The 156,000 growth in jobs disappointed and is well below the recent averages. The back two months were revised lower by a total of 41,000 jobs.

The unemployment rate ticked up to 4.4% even though the participation rate was unchanged at 62.9%. Weekly average earnings fell from .2% to .1%.

This was enough to lift US Stock Indexes higher into the weekend.

The NASDAQ had it’s best week since December 2016, finishing 2.75% higher, and the S&P 500 rose 1.5% for its best weekly performance in 4 months.

However, as illustrated in the chart below, the shortest end of the Treasury curve remains troubled as the debt ceiling panic continues to build.

And while the US 10-yr yields rose modestly to 2.16% after the payroll data, the T-Bill yield dislocation has extended out to 32 .25 basis points.

This  indicates that the market remains extremely nervous about a debt ceiling crisis over the next month, which is not bullish for US equities. 

September 21st versus October 5th T-Bill yield spread