Can Spot Gold Break Above $1370.00?

Posted on | by Todd | Leave a Comment on Can Spot Gold Break Above $1370.00?

Over the last 6-months, the price of Spot Gold has been capped just below the $1370.00 level three times.

With the current price around $1350, the question now is: will Gold be capped again, or will it break over $1370 and head higher?

Looking at Friday’s Commitment of Traders report offers an interesting perspective. The numbers show that the speculators are long and the commercial accounts are very short.

As a rule, since the commercial accounts actually hold the Gold, they are more likely to cover their short exposure quickly.

As such, we see a growing likelihood that Spot Gold will trade back over $1370 for the first time since July 2016, over the medium-term.

This extension of the recent rally will lift local mining names such as NCM, SBM, EVN and SAR.

Newcrest Mining

Santa Barbara

Evolution Mining

 

 

Will Gold Get A Lift From The FOMC?

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The Price of Spot Gold slipped to a 3-week low of $1309.00 as the inverse correlation to the USD strength continues to influence price flows.

By the NY close, the yellow metal had found buyers into the weekend to settle at $1314.00.

With the FOMC expected to raise the FED Funds target on March 22nd, market commentators have noted that the price of Gold has rallied  after the last 5 rates hikes in this cycle.

As illustrated in the chart below, Spot Gold traded at $1240 when the FOMC last raised rates on December 13th. By January 25th, Gold had rallied almost 10% to reach $1350.

Some of the local mining names we are following into the buy zone include NCM, EVN, SBM and SAR.

In addition, investors looking for a “pure play” on Spot Gold can buy the BetaShare Gold ETF with the symbol: QAU

Spot Gold

BetaShare Gold ETF: QAU

 

ALGO UPDATE: Stay Long NCM

Posted on | by Todd | Leave a Comment on ALGO UPDATE: Stay Long NCM

After posting a low of $1238.00 on December 12th, Spot Gold has moved higher and reached $1270.00 in NY Trade last night.

The response of Newcrest shares has been relatively muted, but we expect a pick up over the near-term.

Our ALGO engine triggered a buy signal for NCM on December 15th at $21.75.

We still prefer the long side of NCM, along with the smaller producers SBM, SAR and EVN, and have an upside target near the November 29th high of $24.25.

Newcrest Mining

 

 

Newcrewst Mining Has Been Added To The Model Portfolio

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Our ALGO engine triggered a buy signal on Newcrest Mining at $21.90 yesterday.

Clients and subscribers were notified via email that NCM has been added to our ASX Top 50 portfolio listed in the Premium section of the blog.

The recent slide in Spot Gold prices has impacted domestic Gold producers unevenly. Shares of the smaller firms like SBM, EVN and SAR have held their value and even firmed over recent sessions relative to NCM.

We believe that NCM’s recent sale of its 89.9% stake in Bonikro mine in Cote d’Ivoire has caused some short-term pressure to the share price value investors will support the share price in the $21.80 area.

The current momentum indicators are in oversold territory and the ALGO engine flagged the “higher low” formation based on the October lows near $20.90.

As the price of Spot Gold moves back into the $1300 area, we expect NCM shares to move back into the high $24.00 handle.

Newcrest

 

 

Buy The Dip In Gold

Posted on | by Todd | Leave a Comment on Buy The Dip In Gold

Over the last two weeks, the price of Gold has made two attempts at breaking through the $1300.00 mark.

On both occasions, the yellow metal dropped back to find support just above the $1270.00 level.

This technical pattern is known as a “pennant” formation and is a continuation pattern. In this case, the break out points for range extension are $1308 and $1263.

Fundamentally, the case for buying Gold remains compelling. The surge in volatility across global stock markets combined with heightened geopolitical uncertainty supports the logic for owning Gold or Gold mining shares.

We expect the price of Gold to break through the $1300 level over the near-term. Our preferred Gold mining shares are NCM, EVN, SBM and SAR.

Investors looking to profit from a rally in Gold can either buy these shares outright, or buy their CFDs listed on our SAXO Go platform.

Spot Gold

Newcrest Mining

Santa Barbara Mining

Evolution Mining

 

 

 

 

 

 

 

Buy The Dip In Spot Gold

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Spot Gold dropped over $10.00 on Friday after a 200,000 ounce sell order hit the market into the London close.

These types of large block trades (on both the buy and sell side) have become more frequent over the last few months as investors assess the impact of interest rate policies, currency movements and geopolitical risks.

However, with reported Q3 central bank Gold purchases of over 100 tons, we expect the $1270.00 support level to hold before the yellow metal makes another run at the $1300.00 area.

Our preferred names in the Gold area are NCM, EVN and NST.

NCM is currently trading at 30X trailing earnings and EVN and NST are at around 18X earnings.

As such, the correlation between the between the Spot price and these share prices will remain very positive.

Spot Gold

 

Gold Trades Higher After Golden Week

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A few weeks ago, we posted a report outlining the correlation between the Chinese Golden week holiday and the price of spot Gold.

Over the last four years, the price of Gold has dropped into, and during, Golden Week and then traded higher once the Chinese markets came back online.

As the chart below illustrates, spot Gold posted a low of $1262.00 last Friday and has since lifted by over $30.00.

We continue to look for Gold to trade higher into the end of the year and re-test the the $1350.00 level.

As such, we like long positions in NCM, EVN and SAR. 

Spot Gold

 

Newcrest Mining

Evolution

Saracen

Newcrest Goes Ex-Dividend Today

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Shares of Newcrest are trading lower in early trade as the company went ex-dividend today.

Shareholders will be paid a 9.5 cent dividend, fully-franked, which we expect to increase over the next 6-month period.

The share price has found good buying support in the $22.00 area in recent sessions and we consider the $21.80 to $22.00 levels a reasonable buy zone.

In addition, we have noticed a “higher low” pattern in Evolution Mining (EVN). Our ALGO engine has not yet triggered a buy signal and we will update when that happens.

With a positive base case for spot gold moving higher, we would look for the domestic gold mining sector to improve into year end.

Newcrest Mining

Evolution Mining

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

Gold Jumps Higher On Heighten Tensions Over North Korea

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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