Gold in A Goldilocks Scenario

Both fundamental and technical factors are aligning up for the ascent of Aurum.

As per the World Gold Council while the total supply of gold declined 8% YoY, most forms of demand, viz. jewellery, bar & coin, central bank, technology, were up YoY.

Gold is trending up against all major fiat currencies and a technical break out seems to be in the making.

In our previous write up on Gold (GLD, GOLDX, GLDI, GLDW) and Gold miners (GDX, GDXJ, NUGT, JNUG): The Ascent of Aurum – Long Gold, we wrote a bullish thesis that rested on the following factors:

  1. Declining global mine production in years to come — a result of past, massive, haircuts to capex by some of the largest gold miners around the world. Gold miners’ Capex has declined 65% from 2012 to 2016.
  2. Gold is a safe haven asset and according to world Gold Council’s most recent report on demand trends, current uncertainties in China and Europe are driving these flows.
  3. Technical analysis of gold price chart reveals a strong bullish set-up at a time when this trade is far from being crowded.

We review our thesis and present both fundamental and technical evidence to convince any gold bears out there to get out of the way.

Please click here to view the presentation.

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