I'm not going to give you a TA perspective but from a macro perspective the monetary easing bias the reserve bank of Australia has resorted to is/will change the current dynamics of the trade in ASX gold producers IMO. The rising trend of the $A we have seen recently has now been knocked on the head and we are on a trajectory for disaster in the housing sector in Australia if the reserve bank persists with this policy. During the GFC the only economies that survived property crashes were those who kept interest rates from falling to the bottom of the channel. Any more easing and "pop goes the weasel" (note: the term pop goes the weasel is thought to have come from cloth making; the machine that wound the yarn was called the weasel. Every 1,000 yards, the machine made a popping sound, thus "Pop! goes the weasel."). If we end up at the bottom of the channel our housing market will pop and it won't be a pretty sight. Better to take whatever economic pain we get now from holding rates steady than risking the path to disaster the reserve bank seems to be putting us on. There is no doubt our property market will crash if we take rates to the zero bound based on the evidence from the rest of the world presented to us during the GFC.
Combine this potential property price disaster the reserve bank is brewing for us with the falling trade numbers all of our Asian trading partners are currently experiencing and you've now got a perfect storm for continued falls in $A. This might be tempered slightly by a falling USD although if economic conditions in Japan or Europe worsen faster than in the US then the USD might again strengthen and contribute to further rises in the $A gold price IMO.
One of the biggest shipping companies by fleet size in the world, Japan's Mitsui O.S.K. Lines Ltd, has just been put on review for a downgrade by Moodys (which is a real sign of how our Asian neighbour's economies are performing at the moment) but more importantly Fitch has released commentary saying that Japan's NIRP policy has failed to gain economic traction so could weaken support for Japan's 'A'/stable sovereign credit rating.
https://www.moodys.com/research/Moo...de-on-continued-weak-profitability--PR_348015
http://www.reuters.com/article/idUSFWN1811GD
If Japan's sovereign rating gets downgraded further we are looking at real turmoil in markets. Keep an eye on the Nikkei (down 8.1% since the high it made last Thursday 28/5).
My feeling is we are going to break all time records with the $A gold price this year so some of the money that went chasing USD denominated gold producers might start coming home to roost IMO.
Eshmun
(20min delay)