Is Gold About to Break?

Jordan Eliseo

The Perth Mint

It's been another long week for precious metal bulls, with gold falling below USD $1150oz. A somewhat hawkish sounding Janet Yellen, combined with relative calm as regards the ongoing drama in Greece were enough to further dent the outlook for gold, with the metal now dangerously close to falling through USD $1140oz. So far that level has been the floor in this corrective cycle, but if it fails to hold this time, we wouldn't be surprised to see a relatively swift move back into the USD $1,000oz - USD $1,100oz range, whilst sentiment, which is already terrible, will only worsen. Weakness in the AUD has supported prices for local investors, with gold still up YTD, currently trading just below AUD $1550oz. Whilst we can't help but be concerned about prices short term in USD, we expect currency movements will continue to mitigate losses for investors in Australia, and remain confident that AUD $1,400 (a roughly 10% fall from here) is a likely worst case scenario for existing investors, and best case scenario for those looking to go long. (VIEW LINK)

Gold bull since early 2000. Have spent +20yrs working in investment analytics, research & portfolio construction. Author of two books on investing in gold and the causes of the GFC. Lover of markets, competition & technology

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