Here is essentially the same post again (the one moderated) but with the right chart this time for easier reference.
While POG has given up this weeks rally, it still holds comfortably above recent support at 1211 and above important support of 1180. Maybe it breaks 1180, maybe not. What has broken down is the AUD last night and it's now clearly breaking below 90c at 89.25c. This might be the start of a decline towards at least 80c. The move might be quick now that support is broken (assuming it's not a false break).
If POG holds above its support and even if it just holds around here while AUD falls to 83, that would see the AUDPOG rise from today's $1372 up to $1475. 81c AUD will get it back above A$1500/oz with no help from the USDPOG. If gold moves lower then the AUD now looks likely to offset any further downside in the POG.
Some charts (below) and data from kitco show the gold stocks in the US bottomed around 4 months earlier than the price of gold at the bottom of the 2000 bear market. The HUI low point was Dec 2000 with a value of around 35. Gold was around $275 in late Dec 2000. Gold then dropped to $256 in Jan 2001, rallied in March and then fell again in April 2001 to $256. That was a drop of around $19 or 7% over 4 months from the Dec 2000 high. At the same time that gold dropped through Dec 2000 to Apr 2001, the Hui moved from 35 to around 60 by Mch/April. So while gold dropped a further 7% over 4 months to find its final low, the HUI had a gain of around 70% in the same 3-4 months. The gain had increased to around 130% by around April May but by this time gold had begun to rally off its bottom towards a $290 peak by late May. That peak in gold was only $15 or 5% higher than the Dec level. So the HUI rallied 130% off its low through Dec-May while the gold price only gained 5% over that same period.
US gold stocks might again bottom before gold does but Australian gold stocks might bottom well before the US gold stocks if the break in the AUD continues lower. It is possible our gold stocks are at rock bottom now thanks to the break in the AUD.
ABU Price at posting:
2.3¢ Sentiment: Buy Disclosure: Held
