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
BetaShare Gold ETF: QAU
Over the last 7 months, Gold has traded in a broad range between $1200 and $1300.
As inflation, interest rate expectations and equity market risks have fluctuated over that time, so has the price of Gold.
On balance, we expect the $1200.00 support level to hold and find buyers as the yellow metal moves back to the top part of the recent price range.
Investors looking for the price of Gold to move higher can look to buy NCM, EVN or the BetaShare Gold ETF with the symbol: QAU.
On June 8th, we posted a report on Gold just as the spot price was about to break back above $1300.00 for the first time since last November.
Instead, the yellow metal failed at resistance and has rotated lower finding support at the $1240.00 level.
In that same report, we commented on how the share price of NCM was lagging behind the spot price due to supply concerns from the idle Cadia mine in NSW.
At this point, the spot Gold price and the share price of NCM seem more in sync with both slowly moving back above key resistance levels.
With local stock valuations still very high, we suggest investors look to increase exposure to Gold. We recently took profits in EVN at $2.50 and will look to re-position over the near-term.
We also suggest investors can look to buy the BetaShare Gold ETF with the symbol: QAU.
BetaShare Gold ETF: QAU
Spot gold rose to its highest levels since November near $1,295 per ounce on Wednesday, good for a 13% gain so far in 2017.
In so doing, Gold broke a technical downtrend that has been in place since the September 2011 peak of $1,900 per ounce.
The support in the yellow metal may be evidence of market fear rather than reflationary exuberance. The Chinese Gold and Silver Society Exchange expects 2017 mainland gold imports to increase by 50% from the prior year, amidst increased safe haven demand.
Daily chart analysis points to the next resistance level near the September highs of $1,322.
We continue to accumulate shares and call options on NCM. We also suggest shares in EVN and the BetaShare Gold ETF with the symbol QAU.
After posting a low on May 9th at $1215.00, Gold touched a high $1270.00 in late NY trade on Friday. Internal momentum indicators are looking constructive for a move back to the April high of $1295.00
For investors looking to profit from a higher gold price, we suggest buying shares of NCM, EVN, or the BetaShare Gold ETF with the symbol: QUA.
We have a medium-term target for NCM at $25.50, $3.00 for EVN and $14.00 for QUA. Newcrest Mining
BetaShare Gold ETF