Some charts have really taken off this week. Let’s have a look at a few.
Gold
The long term trend for gold remains up. Medium term it had been going sideways for a number of years. This week it has broken higher potentially signally the start of a new medium-term uptrend.
source:Â https://stocksunderthehood.com/free-resources/gold-seasonality/
Interestingly March was a strong month for gold last year too in what has historically been a poor month for gold. Gold had a great year last year triggered by the fall in bond yields and subsequent fall in the $USD. Wars and uncertainty also tend to help gold.
The gold miners ETF completely underperformed the move in physical gold from December 2023 until the start of this month. In the last 5 sessions, it has reversed its trend and is now potentially playing a bit of catch-up.
Most importantly for Australian gold miners is the gold price in Australian dollars and it’s the best chart of all.
Crude Oil
Slowly but surely the oil price continues to march higher. Markets are enjoying an idyllic time where inflation is falling, interest rates are projected to fall and the US$ is falling. A rising oil price has the potential to derail that and should always be monitored.
Iron Ore
Probably the most important commodity for Australia (along with Oil) is Iron Ore. The price has fallen quite a lot since the start of the year. It’s impressive that our market is at all time highs when you think about the weighting the iron ore price has in our index.
Uranium
The Uranium price is taking a breather from its parabolic rise. The Uranium miners have also. Nevertheless, if the price can remain somewhere around these levels for the medium term, the producers are certain to be highly profitable. There is a chance though that Uranium does what the other hot commodities of recent times (Lithium. Nickel, Coal) and continues to fall from here. Never underestimate the efficiency of markets. If there is a spike in demand like there no doubt is and will be in Uranium, you can expect a swift response from the market to meet that demand. With a uranium price hovering near $100, the incentives are immense.
Bitcoin
Bitcoin continues to be a traders dream. Who knows if it will be legitimised as something of use in the future. The fact is, there have been some significant tailwinds for Bitcoin. Some of those are the same as those that gold is currently experiencing, while the approval of the Bitcoin ETF and the upcoming halving are all reasons to create demand. Ironically, I think the biggest thing that works against bitcoin becoming a legitimate form of payment is the fact it keeps appreciating. If you owned bitcoin, would you want to spend it? If you don’t want to spend it and use it as a form of currency then what is it?
The day ahead
Our market is set to have another good day. Our futures are pointing to a 45 point rise at the open. The US had a great night, while bond yields were flat and the $USD continued to fall.
GQG Partners (ASX:GQG)
https://gqg.com/
GQG Partners (ASX:GQG) has been going very well of late. Any fall in the share price as a result of this may be temporary and an opportunity for those that have been wanting to get on board to do so.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.