Dear Readers,
With so much going on in the precious metals market, we couldn't help but launch our brand new mid-week review segment: a bite-sized review of everything essential you need to know about the precious metals, oil and mining equities market mid-week! We hope that this new segment makes for an enriching, entertaining and informative mid-week experience, whether you're commuting back home after a long day's work, relaxing on your couch with a cup of coffee (or whatever you like!), or deep into researching the markets to better your investment portfolio!
Kicking things off, we're glad to announce that we correctly blew our whistle a couple weeks ago, where Brian, our managing partner, called overbought on gold and tactfully signalled profit-taking to be a sensible move. Yesterday, gold saw its biggest single day decline since 2013, falling to a low of US$4,004.28/oz. Meanwhile, the ASX All Ordinaries Index, in the words of Brian, has taken the escalator and now fallen off a cliff! We just saw the biggest drop we've seen in a single day in the longest time (1,500 points). At the time of writing this segment, think of any Australian gold producer you can, and it's highly probable that their stock price has plunged ~8-10%. At a time where producers rallied in their valuations faster than their fundamental growth, it is only plausible to see such sharp corrections amidst gold's pullback, as it has been the primary driver of gold producer valuations YTD.
Reflecting on this pullback, Brian stated: "Gold and silver's retreat today highlights how overstretched they are since 1st August when they took off. At this stage, I believe investors are split between fear about this pullback and greed from those who believe this may be the end of the selloff so it's time to buy the bounce."
Brian leans toward gold and silver selling down a little more, possibly to US$3,800 gold and US$42 silver to align more with a retracement of the 10-week long parabolic move. With our speculative gold stocks index reaching a perfect 100 (last seen in 2005), gold stocks screamt overbought, and Brian thinks a further 10-15% pullback in the ASX All Ordinaries Gold Index is healthy, and sane.
Here at the Australian Gold Fund, we have just below 15% exposure to cash and precious metals ETFs. We are waiting for another selloff to bring producers down to the fair value range, as we continue to see value emerge in near-term producers and early-stage developers at the current price levels. Which specific producers and developers are they, you ask? One way to do this is to consider signing up to Brian's gold investment and speculation newsletters, The Australian Gold Report or Gold Stock Pro, from Fat Tail Investment Research.
For a limited time, you can use the promo code GOLD50 to get 50% off the first year of subscription.
Moreover, you can sign up for GoldHub Australia as a member for free and get access to our special members only segment, where you can see the relative valuation of gold producers and developers, unlocking value and growth potential!
And there you have it! We hope you enjoyed our new foray into the mid-week review! To know more, stay tuned for our interview with Ausbiz, where Brian reveals everything you need to know about the market, at 7 pm today!