DXY breaks past 104 to be at 104.18 as US 10yr yield moved to 4.1pc, causing Gold to lose -$17 to $2,021.
Gold is only just starting to break lower and a test of $2k is possible in the near term given the sudden bullish uptick in the dollar.
But Gold stocks underperformed Gold by a wide margin as shown below, we saw the last 4 decimated by company specific guidance and we saw the same this morning with poor enthusiasm over the SLA merger with Red5.
AUD Gold (my preferred gold exposure) added +2.2% YTD in direct contrast with US Gold and Aussie gold miners.
This thread has cautioned numerous times that Gold stocks/equities are not Gold, not until we get a consistent, confirmed and sustainable gold bull market. That bull market now has to wait given that US yields and dollar are back on the rise again on the back of recent Fed hawkishness and amidst more robust than expected US economic data.
...now we understand why we should at least pay attention to Radomski's assessment.
In my opinion, a more timely and safer entry into gold stocks would be after or in the aftermath of the 'correction/crash' - gold stocks would get much cheaper if and when the equities meltdown arrives at Wall St. In the interim, gold exposure via digital/physical form in AUD Gold is a reasonable and less volatile space.
Who wants to own gold stocks when the mood is buoyant and bullish? Market participants in the US flock to tech for momentum play. No one cares about how cheap gold stocks are relative to the past. But yes, a good time to buy is when it is down and out. Except that, we can't assume the decline is by any means over. But we can be confident that it should be over when the Fed actually (the word is ACTUALLY) starts to cut rates. That time has not yet arrived, despite all the hope and optimism.
Gold market participants know by now that they thought it would be a great idea to buy gold stocks to get exposure to Gold. Almost a quarter of all the listed gold stocks have suffered declines of >-20% in just over a month, despite US Gold's -1.8% decline and AUD Gold's +2.2%. Now you understand, why I have been cautioning that Gold stocks are not Gold.
