PERFECT STORM – Gold, Dollar Index, S&P 500 and Newmont Mining Corp ISIN CODE: US6516391066
Gold to the top of the year – close August 28th, 2017: USD 1306.92
Gold breaks out the more important supply line of the year. The bullish breakout that brings the yellow metal to the forefront of the international scenario in terms of current and prospective appeal. The signal is unambiguous and is not only valid in the absolute but also comparable terms.
At present, gold strength is intended to self-feed on condition that it does not record a daily closing of less than 1281.62 with targets that can now be searched at 1334.45 before and 1350.00 / 1375.00 later. These potentials are part of a mid-term bullish project that seeks to achieve 1395.00 in the next three months.
The absolute strength of the market is proven by the three compared charts with: the global commodity index Moodys Commodity, the global JP Morgan GBI bond index and the global stock index MSCI ACWI IMI NET TR. As you can note from the three charts below, the performance of gold, in comparative terms, is highlighted with a greater force that is directly attributable to the present indicator below the graphic trends, always in favor of gold.
Consequently, the trend of the dollar is likely to be weak and hardened by further prospective depreciation, especially if a prompt reaction is not forthcoming. We refer in particular to the current Dollar Index surveys that are currently testing support of particular importance not only for the next days but also for the medium / long term: level 91,919.
A weekly closing below this threshold will tend to amplify the dollar’s decline and, consequently, the acceleration of gold. If this happens, we expect from now on the progressive loss of ground until reaching the detection area between 84.50 and 82.50.
In this context, the S&P 500 index after recording an extraordinary bullish sequence, featuring an uninterrupted ten-month series, is set to take a break of reflection that can take up to two months.
This circumstance will happen especially if you will experience further weakness in the next two sessions with the involvement of 2435.00 / 2430.00 area. If this happens, we expect from the moment that the correction still underway will tend to accentuate by reporting the surveys in area 2340.00 / 2330.00.
However, will there be a generalized descent? No there will be stocks that will react better than others due to the passage of the liquidity batons from those like the technology, they have done so well in recent months to others tied to defensive or gold-related sectors.
Among these, the Newmont Mining Corp. ISIN CODE: US6516391066 – NYSE, that stood yesterday by a good bullish signal to bring the title under the spotlight of investors. The perspectives are interesting and let’s glimpse at endless targets at 40.50 and 42.50, provided they do not even record a daily closing below than 36.50 (read more: Newmont Mining isin code US6516391066).