Check the charts on Gold Vs. LHG share price. Whilst LHG has bounced off its low, its rise is not convincing given its long term downtrend. It appears that even with a mild correction to the USD Gold price LHG will pull back quickly. In particular, note the breaish divergence between the LHG share price and the RSI and MACD indicators which are your early warning signals.
LHG has been a dog in the Gold sector for some time and over the past few years as the Gold Price has generally headed higher, it has generally headed lower. It appears the Big Biys look at each opportunity to sell into rallies. I am beginning to do the same as the Gold Price has already rallied so much.
I have begun selling CFDs, and Buying some LHG Puts too. The market depth already is building on the sell side this morning with a $2-3 pullback in the Gold price last night from its highs.
Your call on Gold, perhaps near a near term peak? It lagged Oil in its rise up (did so by a couple of weeks) and perhaps may just be lagging it on the fall and oil peaked two weeks ago. Moreover, the USD/EUR seems supported around the 1.30 mark which will clearly cap Gold's potential. As USD/EUR corrects back to $1.26 (or USD/AUD to approx (.76) that will translate to about a US$13 fall in Gold price and the big boys will sell LHG down further, possibly to $1.14-1.15.
LHG
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