Geopolitics Give Gold A Lift

Between increased hostilities in Syria, and a US Navy carrier group off the coast of Korea, geopolitical risk lifted Gold over $20.00 in overnight trade.

After trading down to $1195.00 on March 15th, the yellow metal has moved $80.00 higher and is now trading near $1275.00.

With momentum indicators approaching over bought levels, we see scope for a pullback to the $1265.00. However, over the next few weeks, a move back to the November 2nd high of $1310.00 looks like a reasonable target.

Over the last few weeks, we have been buying both shares and call options on Newcrest Mining and the GDX Gold Miners ETF.

Chart Newcrest

Buy The Dip in Gold

After a sharp rally on the back of equity weakness last week, Gold has consolidated above the $1240.00 level.

The technical picture is still constructive as the yellow metal is still above the 30-day moving average  at $1234.00 and the RSI reading at just above 56.00.

There are still many global stock indexes trading at elevated prices. The market has proven that the inverse correlation of Gold moving higher, as stocks move lower, still intact.

We see scope for a test of the $1235.00 level before trading higher next week. Our medium-term target is the November 10th high of $1292.00.

Investors looking to profit on a move higher can look at either the Vectors Gold Miners ETF (GDX), buying the dip in Newcrest Mining down to $22.00, or placing Newcrest Call Option strategies.

Chart – GDX
Chart – NCM