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Gold stocks put in a strong performance in the US last night rising into highs at the close on already very healthy intra-day gains while the metal languished late in the session. So encouraging intra-day diversion there indicating that profit takers and shorters had run out of ammo - something we haven't seen for a good while.
My gold basket has been empty for 6 weeks or so while the indexes capitulated, but I've stuffed it this morning with NCM, NST, EVN, RRL. Always a slightly different mix but same formula since last November. Reporting periods may be cushioned by low $A to hold P/Es together, while upside in the metal in $US should get funds looking at stocks globally. Oil looks to be going no where fast too. I have reservations about how things will improve at NCM's Lihir, but the stock gets the nod by me just because it is what the instos buy and price. I don't particularly like it. I am also praying that RRL's recent phenomenal turnaround is sustainable. Within Oz I also like SAR, and outside Oz, RSG might hold up with recent improvements on site looking to come good. OGC have recently made a smart acquisition in the US which helps divert corporate risk away from relying solely on their cash-cow in the Philippines.
Barrick has still got the for sale signs up as they retract towards mid-tier status, but I can't see any Aussies going for those that are left. Could be surprises but not expecting much in the way of M & A for the Aussies for the rest of the year. Obviously punters trading around EVN's acquisitions did handsomely earlier. Maybe NST might move to completely dominate the Tanami (ABU).
Headline on CNN TV last week said gold to $350. The date matched the low in gold so far this month. There's some chance that sort of embarrassing reporting could coincide with a long term low. It always seems to be the case that someone has to act the fool on these key trend changing dates.
Watch if HUI breaches prior lows at around 100 for a signal to bunker down again.
All IMO, of course.
GLTA
