Precious Metals Where to Next for Gold?

Gold

Gold is approaching a strong support area.

Let's take a look at annual highs and lows on Gold since 2011 (year of record high)....

Date Pivot Price
28/1/11 Low 1308
6/9/11 High 1920
16/5/12 Low 1527
5/10/12 High 1795
22/1/13 High 1696
31/12/13 Low 1182
14/3/14 High 1387
7/11/14 Low 1132
22/1/15 High 1306
5/12/15 Low 1046
4/1/16 Low 1067
6/7/16 High 1376
3/1/17 Low 1146

Important: All annual lows since 2011 have come in Nov/Dec/Jan and mainly in Dec/Jan. Gold displays a strong seasonal tendency to form a major low (often lasts for entire year) in these months

Gold is approaching strong support and as I have mentioned elsewhere in passing I believe we will see a major low soon that will also correspond fairly closely with a major high in US equities.

One possible strategy in light of this is to take some profit on International equities holdings and re-allocate to Gold or Gold related assets (preferably income producing) such as stocks/ETF etc as a hedge.

Details on the chart....



No Advice, DYOR

 

I own physical Gold, not exposure to an FX trade (i.e. XAU/USD), hopefully Alex has some of the real stuff too (on top of any exposure for trades)

Gold can be a trade, a hedge in a portfolio, an asset or money of last resort... it can be many different things depending on how, when and who uses it:

Like Alex, I like the chart (holding above bear trend line), though I look at it with less lines

 

Im buying up gold in very small allotments at the moment

 

HA You know what, I'm starting to like you Bully

Agree a little chunk or two of the real stuff can't be beaten as the ultimate hedge, got mine from the Union Bank of Switzerland, assayed and certified too



No advice

 

Last CoT's report showed a swing to short covering.

 

Yes indeed, good support evidence although the commercials can be known to be a little early to move.

 

I was talking to one of my Indian colleague at work. Our Lunch time convo started from property and ended up in Gold. He is buying small amount of Gold for many years now and my parents also invested in Gold at one stage but not anymore.

He was telling he buys back in Inda but here you can buy from perth mont or psrramstta in Sydney etc

But the issue 8s once you buy a nsr or biscuit of gold then you need to hire a locker on bsnk to keep it and pay fees on top of that so I sm still not sure if It is worth nuying some amount and store it or leave the money in offset.!!!

Decisions decisions decisions

 

General info only...

ASX listed ETF is nice and simple

Or another idea for Gold related exposure...



No advice, DYOR

 

Yes, they can be.
But sentiment is pretty low also ATM (but not at puking levels),
If we are going to get another move down its going to have to come very soon IMO.
Otherwise I think gold will rally.
How far though?
Thats the question that needs answering.
Futures price at the EOY may should give us a good indicator of the possibility of whether this Bear will be prolonged into a new low next year or whether Dec '15 was it & we have just been coiling since.
Its a frustrating sector of the market.
No wonder many goldbugs I know have just given up & chased the Crypto's lately instead.

 

Great post @Alex Straker

I bought some NCM a month ago, a bit too early perhaps. Luckily my WHC and other mining stocks more than made up for the loss. Might look to add a bit more to my NCM holding.

 

I have no idea? As I don't follow them.
But out of curiosity,
Do NCM still promote themselves as the 'Miner of Choice'?

Or did they finally bin that slogan after falling with so many others in the same BS 'Ounces in the ground Hoo Hah' they sold to shareholders that were subsequently written off left, right & centre years later after the last top in gold?

 

I have no idea too... haven't traded NCM much over the years and not a large portion of my SMSF portfolio either. Happy to have some exposure in gold for now until I get bored of it

 

Just shorted Gold at 1265, stop loss at 1271.25 & intending to exit some at 1222 then 1206 and reverse to long side. If they take out 1190 this downside leg could run quite deep and patience will be needed.

@pwt I like trading NCM plus a few other ASX Gold related stocks as a 'parallel' to Gold market especially when the sector relative rotations hit a high volatility phase (wide rotations). NCM is typically good for 10-20% swings (although this next leg up I suspect may produce a longer Bull run for Gold into the 1,500's - time will tell).

Traded NCM twice in 2017 so far for 17% and 12% gains respectively. This will be the third entry this year if my price gets hit. The others I trade often are NST, EVN and RRL, in each case well over 50% returns on them for 2017 trading in and out twice, they tend to move as a group a lot of the time. BTW I publically posted a recent NCM trade on PC under 'Who is buying Gold' thread if recall correctly, even posted where to exit for 12% gain

No advice

 

@Alex Straker I remember your post on NCM some time ago. Good call

 

Medium to long term gold is going to go up dramatically due to a multitude of factors:-
1) peak gold was last yr or this yr
2) no large supply sources coming on line and long lead times to do so (ie 10+ years). A gold exploration boom will start to occur (subscribe to explorationinsights.com for more info)
3) the end of the USD petrodollar is happeneing and China and Russia are moving to transacting gold for oil (follow @lukegromen on twitter)
4) world wide printing of money, trillions in debt and debasement of fiat currencies. I am wondering if this is going to lead to inflation or not???
5) USA real rates when negative (see TIPS) have a very very strong correlation with strong gold. These rates are currently in positive territory, and the FED raising rates doesn't help this. However i believe that we are going to start to see US inflation start to rise, the USA economy slow down and the FED are going to have to aggressively lower rates to extreme levels (perhaps minus 2-5%) to keep the USA economy afloat.

Personally, gold has massive asymmetry to the upside, not the downside in my mind

 

Thanks @Nick23 and I agree.... I suspect you may have misunderstood my original post, apologies I should have been clearer. I too expect strong upside over the long term which is why I am alerting to a likely major technical low coming in the near term as an opportunity to go long from 1206 or 1222 areas. Expect Gold to drop in to the zone fairly soon.

No advice

 

My only exposure to gold is via Regis resources (RRL) a buy and hold for me, any other recommendations on gold related income producers?

 

@Silverson I think what you are after is in this post.... No advice

 

If you would like gold producers exposure you have a couple of ways to go about this:-

Buy an ETF product that gets you an exposure to the sector (Beta) - for example, GDXJ, GDX, SGDM and SGDJ. The other thing to look at is silver producers, whom tend to act like gold stocks, but on steriods (SIL and SILJ) - bear in mind that the Gold to Silver ratio is currently at a reasonably large ration (75) and during a properly bull market this ratio will narrow...toward numbers like 30-35.

If you fancy yourself as a stock picker (ie looking for Alpha), then I'd suggest that you subscribe to a few newsletter services to get yourself some help with regards to the merits /risks associated with certain stocks. Otherwise, jump on this website CEO.CA - there is HEAPS of resource focused stuff available.