Gold Price / $US / $A / AZY

Gold got a bit of a beating in $US on Friday night. People were liquidating what they could to cover margin calls, etc.

But gold ended UP in $A, back well above $A5,000/oz, after the $A dropped 5% in response to aggressive Chinese retaliation against Wednesday's US tarrifs, after the ASX had closed.

So it is now on for one and all: China is at war with its largest export market, the USA. A trade war that is. And neither leader looks likely to back down (though you never know with DT)

And gold served it's purpose here for us: it has worked as a hedge against a falling Australian dollar. So if you held gold, not $A, you gained in the local currency.

Now tomorrow morning, when the market opens for its first session after the China retaliatory tarrifs and other trade restrictions on Friday night (they restricted the export of rare earths to the US!) the newsfeeds are predicting a 4-5% fall in the ASX. This is because the Chinese reaction to Wednesdays US tarrifs, after market on Friday night, was far harsher than expected. And because our mining-export economy (largely iron ore and coal) is highly geared to the growth of the Chinese economy. When China takes a hit we will take an even bigger hit.

So on Monday morning people are likely to be selling whatever they can to to cover margin calls and take safety in cash. And AZY shares may well get caught in this, along with anything else of value that can be sold.

But gold held up well in $A on Friday night. It rose to $A5,030/oz.

And AZY is principally a gold stock, with 2.3Moz of mineable gold in the ground, plus it is due an announcement of a material increase in its gold resource, and about to start drilling a potenially very large gold discovery close by, and it has a very healthy bank balance of close to $A40m. So AZY an undervalued proxy for actual gold, and I for one am hanging onto it.

Antipa (and one other small gold speccy that I hold for fun) are the only shares that I have left. I have sold absolutely everything else! And I am happy with this.

'In Gold We Trust!'

This is only my personal opinion of course. It is DEFINITELY NOT financial advice. But I won't be selling a single share in Antipa on Monday morning. And if it comes off much in price in the panic, I will be buying more.

Back to work.