The net short position in gold futures is now 26,500 contracts. At the depth of the bear market in December 2015, there was only two weeks where the positioning was more extreme, at 27,200 contracts.
Today, I’ll take a look at the Aussie dollar gold price, which adjusts for the difference between the US and Aussie dollar exchange rate. This is a far more important price to watch for Aussie gold stock investors.
As far as the timing on that goes, it might pay to keep an eye on the gold price. It’s been under pressure lately, at least in US dollar terms.
The massive investment into liquid natural gas (LNG) over the past decade has resulted in the development of a new export industry. It may finally start to pay off over the next few years.
AuStar Gold Limited [ASX:AUL] shows that it’s benefiting from this boom, as its shares have risen by 12.50% during the day.
Silver Lake is a gold producing company with resources in Western Australia. Silver Lake Resources Limited [ASX:SLR] shares are currently trading at 60 cents, up from 58 cents yesterday.
There is a good chance that the long term impact of this royal commission will be a complete dismantling of bank business models. As I pointed out yesterday, banks are already starting to put their funds management businesses up for sale. Next, the rest of the wealth management arms (including the financial planning networks) will probably go too.
US markets bounced back overnight. There was no reason in particular. Probably just that, on consideration, the previous day’s falls might have been a little excessive. Still, the market feels a little bit like the proverbial cat on a hot tin roof. That is, edgy, nervous, and ready to jump if need be. In my view, the risk of a trade war is higher than many people think.
If you want to get into an asset in a bull market instead, take a look at gold. Since bottoming in late 2015, gold has been in a bull market. It’s just that most people haven’t noticed. Early bull markets are tough to identify, in the same way that early bear markets are tough to identify.
Aussie gold stocks have outperformed strongly during the market’s recent convulsions. They are a great hedge in times of increasing economic uncertainty like we’re in now. The bull market conditions are set to continue for gold. The Aussie dollar gold price is approaching $1,750 an ounce, the highest price since mid-2016 and enough to fatten most well run gold miners’ margins.