All Ordinaries Gold Index Archives - Page 5 of 7

August 10, 2018August 10, 2018

No Silver lining for Gold stocks

A long-term chart shows Silver broke support at $16/ounce and is headed for a test of its 2015 low at $14.

Spot Silver in USD

Silver is more volatile but often indicates, ahead of Gold, the direction of the two precious metals. At present that suggests Gold is likely to test its 2015 low of $1050/ounce.

Spot Gold in USD

China’s Yuan continues to fall against the US Dollar.

CNY/USD

The Dollar Index followed through after breaking resistance at 95. Retracement to test the new support level is now unlikely unless China intervenes to support the Yuan. Focus shifts to the long-term target of 103.

Dollar Index

The Australian Dollar broke support at 73 US cents, the Trend Index peak below zero warning of a strong decline. This may cushion local gold miners, to some extent, from the falling US Dollar price but Gold is more volatile.

Australian Dollar/USD

The All Ordinaries Gold Index (XGD) continues to test support at 4900. Breach is likely and would offer a long-term target of 4100.

All Ordinaries Gold Index

Not a good time to buy Gold stocks.

August 4, 2018August 4, 2018

Dollar strength hurts Aussie gold stocks

China’s Yuan continues its steep descent against the US Dollar.

CNY/USD

The weakening Yuan strengthened demand for Dollars, with the Dollar Index breaking through strong resistance at 95. Expect retracement to test the new support level. Respect would confirm the long-term target at the 2016/2017 highs of 103.

Dollar Index

The strong Dollar weakened demand for Gold, with the spot price heading for $1200/ounce after breaching short-term support at $1220.

Spot Gold in USD

A long-term gold chart shows likely support levels at $1150 and $1050/ounce.

Spot Gold in USD - Quarterly

The Australian Dollar continues to range between 73.50 and 75.00 US cents, leaving local gold miners exposed to the falling Dollar price.

Australian Dollar/USD

The All Ordinaries Gold Index (XGD) is testing support at 4900. Breach is likely and penetration of the rising trendline warns of a strong decline, with a LT target of 4100.

All Ordinaries Gold Index

A sharp fall in the Aussie Dollar would soften the blow. But hope isn’t a strategy.

July 27, 2018

Falling Yuan strengthens the Dollar but weakens Gold

China failed to intervene in the past few weeks, allowing the Yuan to fall to offset the impact of tariffs instead of selling foreign reserves to support the currency. Their actions risk further retaliation by the Trump administration and could spark a full-blown trade war.

CNY/USD

A weakening Yuan is likely to increase demand for US Dollars, both as investors in the Middle Kingdom seek to withdraw and as borrowers with USD-denominated loans seek to hedge or repay.

The Dollar Index continues to test strong resistance at 95. Breakout is likely and would offer a target of 2016/2017 highs at 103.

Dollar Index

Spot Gold is in a primary down-trend, consolidating in a narrow band above short-term support at $1220/ounce. Breach of support is likely and would offer a short-term target of $1200.

Spot Gold in USD

The Australian Dollar is also in a primary down-trend, consolidating above 73.50 US cents. So far, the weaker currency has cushioned local gold miners from the impact of falling spot prices.

Australian Dollar/USD

The All Ordinaries Gold Index (XGD) recovered above support at 4950. Follow-through above 5100 would indicate another test of 5400.

All Ordinaries Gold Index

But downside risk to Australian gold stocks is rising as the USD spot price falls. Gold is more volatile than the Aussie Dollar.

July 21, 2018

Gold breaches primary support

The Dollar price of gold breached support at $1240/ounce, signaling a primary down-trend. A long tail indicates active buyers and we can expect retracement to test the new resistance level at $1250.

Spot Gold in USD

The Dollar Index continues to test strong resistance at 95.

Dollar Index

But Chinese selling to support the Yuan has not materialized in sufficient magnitude to reverse Dollar strength. Dollar Index breakout above 95 is likely to spur selling of gold.

CNY/USD

The Australian Dollar has not weakened sufficiently to protect local gold miners, with the price of Gold in Australian Dollars falling sharply.

Gold Price in AUD

The All Ordinaries Gold Index (XGD) broke support at 4950. Expect a test of 4600.

All Ordinaries Gold Index

Downside risk to Australian gold stocks is rising.

July 19, 2018

Gold breaks support

The Dollar price of gold has broken support at $1240/ounce, signaling a primary down-trend.

Spot Gold in USD

The Dollar Index continues to test resistance, consolidating in a narrow band below 95, a bullish sign. Chinese selling of the Dollar, to support the Yuan, has not materialized in sufficient magnitude to reverse Dollar strength. Breakout above 95 would spur selling of gold.

Dollar Index

The Australian Dollar has not weakened sufficiently to protect local gold miners. The All Ordinaries Gold Index (XGD) is heading for a test of support at 4900/4950. Given the circumstances, support is unlikely to hold. Expect a test of 4600.

All Ordinaries Gold Index

July 19, 2018September 23, 2019

Time to sell Gold stocks

Stocks: Evolution Mining, Northern Star Resources, Regis Resources, St Barbara
Symbols: EVN, NST, RRL, SBM
Exchange: ASX
Date: July 19, 2018

The Dollar price of gold has broken support at $1240/ounce, signaling a primary down-trend.

Spot Gold in USD

Dollar Index

All Ordinaries Gold Index

Bearish divergence on 21-day Twiggs Money Flow warns of selling pressure across all four gold stocks in the Australian Growth portfolio.

Evolution (EVN) is the weakest, having broken primary support at $3.10.

Evolution (EVN)

Northern Star (NST) broke medium-term support at $7.00 but is still in an up-trend. LT bearish divergence on Money Flow warns of selling pressure.

Northern Star (NST)

Regis Resources (RRL) respected medium-term support at $4.90 but Money Flow peaks below zero warn of strong selling pressure.

Regis Resources (RRL)

St Barbara (SBM) respected its rising trendline but Money Flow also warns of selling pressure.

St Barbara (SBM)

Conclusion

I don’t like the idea of holding gold stocks long-term when the USD price of gold is in a primary down-trend. Now is a good time to lock in profits from the last 6 months.

SELL (July 19, 2018)

Disclosure

Staff of The Patient Investor may directly or indirectly own shares in the above companies.

July 14, 2018

Gold tests support

China continues to support the Yuan and we can expect consolidation around 15 US cents. Threat of trade tariffs is weakening the Yuan, forcing the PBOC to sell off foreign reserves to prevent a downward spiral as investors flee and borrowers hedge against the stronger Dollar.

Dollar/Yuan

PBOC sale of foreign reserves, mainly held in US Treasuries and mortgage-backed securities, would drive up yields and weaken the Dollar. The Dollar Index continues to test resistance at 95. Respect is likely and would warn of another correction. While unlikely, breakout above 95 would signal that the PBOC is sitting on its hands while the Dollar advances to an initial target of 100.

Dollar Index

Gold is testing primary support at $1240/ounce. A stronger Dollar would breach support, warning of a decline to $1150. Respect of primary support is more likely and would signal another rally.

Spot Gold

The price of gold in Australian Dollars has been edging up over the past few years as the Aussie Dollar weakens. But the monthly chart below shows that Gold (USD) has fallen faster than the Aussie Dollar over the last 3 months. Large bearish divergence on the Trend Index indicates selling pressure. Breach of support at $1650 (AUD) and the rising trendline would warn of a reversal.

Gold in Aussie Dollars

The All Ordinaries Gold Index is a bit stronger, having broken through resistance at 5000. A correction that respects the rising trendline and new support level at 5000 would confirm the primary advance, with a target of 6000.

All Ordinaries Gold Index

July 6, 2018July 6, 2018

Gold, Dollar and the Yuan

China’s Yuan fell sharply over the last 3 weeks, with the threat of US trade tariffs.

Dollar/Yuan

Risk of capital flight will force the PBOC to sell foreign reserves to support the Yuan. It took $1 trillion to stem the last fall, so expect a sizable sell-off in Chinese holdings of US Dollar assets, mainly Treasuries and mortgage-backed securities. The outflow is likely to weaken the Dollar, which is likely to strengthen Gold.

The Dollar Index encountered stubborn resistance at 95. Respect would warn of another correction.

Dollar Index

Gold found support at $1250/ounce. Respect of the primary support level would suggest another rally.

Spot Gold

The Aussie Dollar is likely to strengthen if the US Dollar falls.

AUDUSD

A stronger US Dollar is expected to be mildly bullish for Australian gold stocks, with a stronger Aussie Dollar offsetting some of the gains.

The All Ordinaries Gold Index broke through resistance at 5250, signaling a primary advance with a target of 6000. Follow-through above 5300, after the recent retracement, would strengthen the signal.

All Ordinaries Gold Index

June 28, 2018June 28, 2018

Aussie Gold breakout

The All Ordinaries Gold Index broke through resistance at 5250, signaling a primary advance with a target of 6000. I remain cautious while the Dollar-price of Gold is falling; respect of Gold support at $1250/ounce would strengthen the bull signal.

All Ordinaries Gold Index

The Aussie Dollar continues to fall, boosting local gold stocks.

AUDUSD

Despite the Dollar-price of gold heading for a test of primary support between $1240 and $1250. Trend Index peaks below zero flag selling pressure.

Spot Gold

Largely because the Dollar is strengthening, with the Dollar Index breaking through resistance at 95 to signal continuation of the recent advance.

Dollar Index

A sharp fall in China’s Yuan is unsettling global financial markets.

Dollar/Yuan

The normal response to uncertainty is a flight to safety which boosts the Dollar, Yen and Gold. But this looks like a straight arm-wrestle between the Yuan and the Dollar, with strong demand for the greenback weakening the Dollar-price of Gold.

June 23, 2018June 23, 2018

Gold weakens as Dollar dominates

The Dollar Index continues to test resistance at 95.

Mohammed El-Erian believes the Dollar is underpriced:

“…the dollar index is now at a 2018 high and, IMO, markets as a whole are yet to price fully the growth and policy differentials that favor the US over many other countries.”

Dollar Index

Expect another test of short-term support at 93.20 but respect is likely and breakout above 95 would signal another advance.

A strong Dollar would suggest weaker gold prices (in Dollars). Spot gold breached support at $1280/ounce, warning of a test of primary support between $1240 and $1250. Trend Index peaks below zero flag selling pressure.

Spot Gold

Australian gold stocks face a different set of drivers. The strong greenback weakened the Aussie Dollar, breach of primary support at 75 warning of a decline to 70 US cents. A long tail on the latest candle suggests a continuing arm-wrestle between buyers and sellers. But the Trend Index peak below zero indicates, in the medium-term, that sellers outweigh buyers.

AUDUSD

Buoyed by a weaker Aussie Dollar, the All Ordinaries Gold Index is rallying to test resistance at 5250. Breakout would signal another advance but retracement is likely to first test support at the rising trendline.

All Ordinaries Gold Index