Let’s talk about breaking downtrends.

No one can accuse the Aussie golds of lacking volatility.

If we’re talking producers they also tend to move largely in concert, and frequently put up lovely ranging trends as can clearly be seen here on the Ramelius (ASX:RMS) one year chart:

ramelius gold

The charts for Silver Lake (ASX:SLR) and Northern Star (ASX:NST) are very similar.

Golds also have a lovely habit of moving ahead of the gold price, and the reprieve that we’ve seen overnight back up above $1700/oz US seems to be somewhat complemented by RMS getting off the mat from way down at $1.20 – bargain basement stuff if you’re into hindsight bias – especially when considering it’s more than 50% off the top of the prints above $2.40 that Ramelius was knocking out dating back to September last year.

One night does not a trend make, and the bounce in gold on a somewhat weaker USD and/or 10-year bonds copping a modest bid (think “real yields”) doesn’t mean that gold is about to resume its broader uptrend.

It’s still in downtrend, no two ways about it.

But I’m interested to go fishing in some of these gold majors in coming days and weeks, thinking that I’ve a bit more context price-wise with which to find some levels.

Today’s gap up doesn’t currently seem like the day, but my buying interest in coming weeks might start with the gap fill back to 146c in the case of Ramelius, with further interest on a re-test of the downtrend in the 130s if that was also observed.

Again we’re going to be assisted here if the gold equities do indeed move ahead of the spot price as they so often do, and so whilst acknowledging that, I’m happy to be a buyer between 130 and 146c with a hard stop sub 120c given that was the recent low.

Steve Collette of Collette Capital Pty Ltd (ABN 56645766507) is a Corporate Authorised Representative (No. 1284431) of Sanlam Private Wealth (AFS License No. 337927), which only provides general advice.

Collette Capital only makes services available to professional and sophisticated investors as defined by the Corporations Act, Section (s)708(8)C and 761G(7)C.

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