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Australian Dollar Following Gold

By Jack DavisForexJan 17, 2017 11:16
au.investing.com/analysis/australian-dollar-following-gold-200172453
Australian Dollar Following Gold
By Jack Davis   |  Jan 17, 2017 11:16
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Originally published by Chamber of Merchants

2017 – An Update

The Australian dollar has been on an impressive rally since Christmas, moving from about 71.5 to a high of 74.7 last night, a 4.5% increase in just 3 weeks. Gold in USD terms has moved from $1122 to a high of $1197 a move of 6.7%. The move in AUD gold is just 3% over that time.

Chart
Chart

On a daily chart going back to 2013 we can see there is a very similar correlation with USD gold starting to out perform at the beginning of 2016. That last little uptick in both of them is the chart above.

Chart
Chart

I don’t see much of a fundamental reason for the Australian dollar to be rising almost as much as USD gold, so I expect a slight pull back in the next few days/weeks which should give the Australian dollar gold price a boost. Some of the key data that came out of the ABS this month includes building approvals, retail trade and job vacancies. A mixed bag with approvals down, job vacancies up and retail trade flat. The December retail trade will be the one to watch out for, its due out next month.

Building Approvals, Australia, Nov 2016

Table
Table

Retail Trade, Australia, Nov 2016

Table
Table

Job Vacancies, Australia, Nov 2016

Table
Table

The Gold Miners

In my first post “Blood In The Streets” I mentioned how the miners had bottomed and to get ready for the next run up. Since then the iShares S&P/TSX Global Gold (TO:XGD) has gone from 3576 on Dec 22nd to 4360 currently. That is a 22% move in just over 3 weeks. Not Bad At All!

Some of the individual miners have done even better.

Northern Star Resources Ltd (AX:NST) – 26%
Evolution Mining Ltd (AX:EVN)– 37%
Blackham Resources Ltd (AX:BLK)– 36%
Millennium (AX:MOY)– 44%
Resolute Mining Ltd (AX:RSG)– 32%
Ramelius Resources Ltd (AX:RMS)– 28%
Emmerson Resources Ltd (AX:ERM)– 32%

PS: On a side note, how cool is Trump going to be as a president for investors. So fun to watch.

| The Speculator

Australian Dollar Following Gold
 

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