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.

The Doldrum in Platinum – Part II

This is the second article in a three part series. Our focus in this article will be on the state of South Africa and its currency.

South Africa – on the verge of being a failed state

As a primer, we encourage you to read the following two articles to truly appreciate the current state of affairs in South Africa:

  1. A fascinating piece written by Mr. Michael Fridjhon, titled: South Africa: The Rambo Nation.
    • Given the rate at which things are falling apart, it’s evident we are running out of time. Forget about downgrades, #GuptaLeaks and elective conferences. If we don’t address what is happening, it’s only a matter of time before the kind of widespread looting which follows a natural disaster will become a norm. If the law cannot hold, lawlessness followed by martial law (replete with its own abuses) is what awaits us – and it’s just around the corner.

  2. A brilliant piece in today’s Financial Times, written by David Pilling, titled: How corruption became ‘state capture’ in South Africa.
    • The National Prosecution Authority, headed by Shaun Abrahams, a Zuma appointee, has denied suggestions that it prosecutes selectively. Mr Zuma, for one, has been a beneficiary of the office’s busy workload. So far, he has avoided prosecution on no fewer than 783 pending charges of fraud and graft.

Please click here to read the article.