Friday's 4.5% fall in the All Ordinaries gold index was consistent with the warning in my 4 February wire and each of the PortfolioDirect weekly reports since...

John Robertson

PortfolioDirect

Friday's 4.5% fall in the All Ordinaries gold index was consistent with the warning in my 4 February wire and each of the PortfolioDirect weekly reports since then highlighting the vulnerability of the Australian gold sector to a downside move. At the close on Friday, I posted a view on our website ((VIEW LINK) with the attached chart reiterating the risk of the index dropping another 8-10% which I had expected imminently without a move in gold prices. In overnight US markets, gold fell following a strong monthly employment report which was accompanied by a fall in bond prices and a rise in the US dollar. Now, a fall in sector prices of 5-10% is highly likely on Monday in Australian trading. A reversion to the bottom end of the Australian gold sector trading range which I had been expecting would imply a 20% decline. There still appears little reason to hold the sector until prices can first stabilise around that lower level.


John Robertson
John Robertson
PortfolioDirect

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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