AUD Gold is steady as she goes
+ 1.22% over past 1 week
+ 6.87% over past 1 month
+11.49% over past 1 year
XGD (gold stocks)
- 1.07% over past 1 week
+ 4.84% over past 1 month
+9.61% over past 1 year
..but at individual gold stock level,
DEG
- 7.31% over past 1 week
- 2.67% over past 1 month
-19.4% over past 1 year
Risk: reward for Gold stocks has been poor as compared against AUD Gold (physical/digital) plus
Exposure to gold stocks is exposure to a probable overdue stock market correction.
I had cautioned on this for some time now....gold newsletters and gold bugs know this disconnect but want to take a contrarian approach, which is fair enough, but until things turn around, there's no compelling reason (yet) to be brave, I'll keep loading on AUD Gold, because steady she is as she goes.
How steady? Take a look at this chart below with All time view
If USD goes down, Gold rallies but AUD also moves higher but typically smaller move higher and does not fully offset gold's rise
If USD goes up, Gold could go lower but offset by AUD's move lower typically more than offset Gold's decline but Gold could also go sideways with AUD moving down
AUD Gold is IMO our perfect hedge against a loss of purchasing power arising from our weak Aussie. Yet, has no downside attributable to equity market volatility.
