Which way? Gold.

Discussion in 'Commodity Futures' started by themickey, Aug 20, 2019.

  1. themickey

    themickey

    Gold recovers but UBS warns investors to ‘get out’
    Alex Gluyas Markets Reporter Aug 17, 2021 https://www.afr.com/markets/commodi...bs-warns-investors-to-get-out-20210817-p58jg0

    A turbulent week for gold has strategists at odds over the precious metal’s current utility as investors weigh the risks posed by a strengthening US dollar and global recovery with inflation concerns and low bond yields.

    The gold price climbed for the fourth consecutive day, rising 0.4 per cent to $US1786.95 an ounce, and clawing back the losses it suffered in last week’s flash crash.

    UBS has warned that the precious metal’s rebound will be short-lived, urging investors to ditch the commodity. It says the price could drop towards $US1600 an ounce.

    However, other strategists are seizing on a buying opportunity, particularly for ASX-listed gold producers.

    “The message must be: if you have a tactical position, get out; if you have a strategic position, hedge it,” Dominic Schnider, head of commodities and Asia-Pacific foreign exchange at UBS Global Wealth Management CIO Office, told Bloomberg.

    “In a world that looks better, why would you want to hold so much insurance asset, and that simply means the market needs to balance at the lower level.”

    This view is predicated on an optimistic outlook for the global recovery, in which inflationary pressures ease and investors jump back into bonds, pushing yields higher. It also implies further support for the US dollar, particularly if the US Federal Reserve’s hints of a rate increase materialise this year.

    Analysts at Singapore’s OCBC Bank underscore the inevitable rise of US real yields in response to increasingly positive economic data as a significant obstacle for further gains in gold prices.

    Overstated anxieties
    “We agree with [the] US bond market’s sanguine assessment of inflation risks, but the decline in US real yields seems to have overstated growth anxieties,” Vasu Menon, executive director of investment strategy at OCBC’s wealth management arm in Singapore, said.

    “Prospects for an acceleration in US jobs growth by September onwards, as extended unemployment benefits expire nationwide, could drive US real yield back up to the detriment of gold.

    “Stronger investor confidence that the delta variant is not a serious threat to global growth … could also help lift US real yields from current low levels.”

    The current ambivalence across markets over the macroeconomic environment means it is unlikely that gold will establish a clear direction in the short term, but OCBC expects the metal to fall to $US1675 in a year’s time.

    “The lack of definitive catalysts will likely keep gold treading water in the near-term even as valuations have cheapened on the back of lower US real yields,” Mr Menon said.

    “A grind lower in the gold price remains the most likely outcome, with the downside cushioned by paring of US dollar gains once risk sentiment stabilises.”

    The bulls
    Demand has returned for the asset over the past few days as the US military quits Afghanistan and weaker than expected economic data out of China adds to fears of slowing global growth.

    Goldman Sachs maintains a $US2000 forecast for the precious metal towards the end of this year, given its projection that consumer and central bank purchasing will pick up.

    Other analysts say structural tailwinds remain intact, which could fuel another rise in gold prices.

    “Negative real rates and inflation in the US offer a solid foundation for higher gold prices,” Joe Foster, portfolio manager and gold strategist at VanEck, said.
    This is creating an opportunity for investors to buy miners of the metal, he said, pointing at Northern Star and Evolution Mining as being undervalued.

    “Gold miners are making a strong case for value investors right now; debt reduction and free cash flow generation has fundamentally transformed how these companies look on both an absolute and relative valuation perspective.

    “Profit margins are very healthy and the gold mining sector of today may start to attract more and more investors.”
     
    #341     Aug 17, 2021
  2. themickey

    themickey

    wfAifGbspAtLwAAAABJRU5ErkJggg==.png
    Chart is Gold price in AUD versus ASX Gold index XGD.AX.

    As the Australian dollar falls, Gold becomes more valuable relatively.
    So the chart indicates rising gold price (black line) and the XGD Index (green) appearing to be at about support level.
     
    #342     Aug 26, 2021
  3. Ed48

    Ed48

    #343     Aug 27, 2021
    themickey likes this.
  4. themickey

    themickey

    The ASX has approx 20% of its stocks which are involved in gold.
    Day after day we are subject to the media pumping bs gold stocks, very tiresome the constant level of hoop and hype about gold going to the moon.
     
    #344     Aug 27, 2021
    Ed48 likes this.
  5. Ed48

    Ed48

    Yep, I fell for the BS (ZIRP/QE) about 8 years ago and sunk a chunk of change in precious metals. Still holding this now.

    If only I'd bailed out and stuck it in the Nasdaq or Bitcoin.

    Every year the "experts" keep saying the mother of all bull markets is coming but it never materialises. I suppose, like a stopped clock, one day they might be right.
     
    #345     Aug 27, 2021
    themickey likes this.
  6. themickey

    themickey

    Ditto about 12 months ago. Once I've exited, not going back again, way too difficult to know what it's doing next.
     
    #346     Aug 27, 2021
  7. themickey

    themickey

    upload_2021-9-3_19-51-0.png

    Day after day in Australia we get this stupid gold hyping shit like this, fuckin annoying, never lets up.
     
    #347     Sep 3, 2021
  8. Overnight

    Overnight

    Why don't you get into something more fun, like RBOB futures? Whooop!
     
    #348     Sep 3, 2021
  9. themickey

    themickey

    I don't know why the vast majority of gold and silver stocks are up today and looking bullish.
    Maybe the crowd believe September & October will be bearish and gold will save them.
    Maybe it's because crypto stocks are looking a bit sad of late.
    But a piffling move on gold cash seems to have fired up the perpetual bulls.
    upload_2021-9-14_4-20-58.png
     
    #349     Sep 13, 2021
  10. They will both go up
     
    #350     Sep 13, 2021