Gold stock sentiment indicator.
One article that really caught my attention this morning was Chinas’ threat to limit REE supply to the US.
While I have always known it exists and expected this threat to become a reality, the timing has caught me by surprise.
Things must be a lot hotter in the trade dispute than is being reported.
https://www.cbsnews.com/amp/news/rare-earths-china-us-trade-war-threatens-clampdown/
I have always considered REEs as the Chinese trade tactical nuke.
You only have to think what happened back in 2010 to understand what this threat implies.
Could also be a case of putting the boot in while the opponent is on the ground.
Australia has been a leader in REE diversification from Chinese supply.
Watch this space.
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The other item of interest is the fall in revenue by US companies by more than 40%.
Mixed results as expected from the US corporate sector.
While expected, money printing and the fed debt super-sopper is doing its’ job.
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A sudden drop in air pressure and a perfect storm may form.
This is not necessarily good for gold stocks.
The current rise in the gold price could be taken as a barometric reading of economies and markets.
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Plenty of Aussie economic data on the horizon.
Watch the AUD.
A pull back in the AUD and gold stocks could really catch a bid.
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Now that gold is finally going where everyone expected it to go, there seems to be a stunned silence from this sector.
Gold stocks are catching a bid across the board, as shown by the indicator.
Leading indicators are maintaining the 60% level. They rarely do this for very long so I anticipate a little consolidation coming up.
Quality juniors are most likely to benefit in the near term.
The AUD is holding up at resistance levels.
Recent rises in US$POG have been offset in A$POG by the strengthening AUD.
This is playing out as I expected a couple of months ago.
From my charting perspective, the AUD needed to rise (or USD fall) to allow headroom for US$POG to move.
I would be perfectly happy to see gold maintain this level for a week or more while the reporting season concludes.
Here is the indicator.
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