ncm & au market wrap-up

Gold up 4.77% over last 30 days (30 day metric down 0.9% since end of last week 5.67%)

Gold up 11.00% over last 60 days (60 day metric up 2.21% since end of last week 8.79%)

Gold up 16.35% since low on 19 Dec 2013 (up 3.37% since end of last week 12.98%)

Trend for gold remains firmly up. Small slow down on 30 day metric since the end of last week.

This week, all expected softness in the gold price from improving US fundamentals has been masked by rises in its price due to tensions in Crimea and weak Chinese data that caught the markets unaware.

This week was also pretty much as I expected with good buying opportunities for NCM stock on Monday and Tuesday following the drop in the POG after the release of the positive US employment numbers after market close last Friday. The rise in the POG to the US$1370 level on Wednesday has consolidated the price of NCM stock above the $12 mark, although weak Chinese data, iron ore and metal prices weighed on the overall market later in the week and combined with Friday’s 1.15% fall on the local bourse resulted in a sell down on Friday of NCM by investment funds pegged to the All Ordinaries index and traders looking for shelter over the weekend. Short selling may have been a feature of Friday's trade.

Excluding possible limitations set by NCM fundamentals or news from NCM, short term catalysts for the NCM share price are IMO:

Very short term (1 week) positive catalysts for NCM:

Military escalations due to tomorrows referendum in Crimea could push gold to new highs this week (risk medium). Increased upward pressure on gold price as referendum goes ahead and the US and Europe impose sanctions on Russia (risk high). Increased upwards pressure on gold as Russia retaliates by turning off the tap to the Ukrainian and European energy markets (risk medium to high). Possible unknown monetary, economic and political flow on effects from the situation in the Ukraine (risk remains medium). Growing fall in confidence in China and their banking and monetary system (risk low to medium). More downward pressure on the Chinese Yuan could spark currency war between China and the US (risk low to medium).

Very short term (1 week) negative catalysts for NCM:

Further falls in POG due to increasing confidence in US economy (risk remains low). Possible negative off-set in share price due to NCM’s removal from S&P/ASX 20 Index (risk low to medium). More falls in the local (and international) bourse next week sparking selling of NCM stock by institutions whose trading policies are tied to the All Ordinaries index (risk medium). Increased short selling of NCM stock (risk low). Sudden fall in POG for whatever reason causing a sharp fall in the NCM share price due to its out performance of gold since 19 Dec 2013 (risk low to medium).

With the price of gold finishing the week at US$1382 and peaking overnight in NY at US$1389.60 next week should be a good week for holders of NCM stock and traders who are leveraged to the long side :)

SilentO

This is not investment advice only my sincere and humble opinion. People should always seek professional advice if they are unsure when making investment decisions.