Gold at ATH.....what do your tea leaves say?

I don't know about "undervalued" so I didn't choose it but I see macroeconomic tailwinds for the price. It's the opportunity cost that may be an issue when compared to other assets that are likely to do well in an easing rate environment.

 

Remember it's only a select few central banks who do that and they don't buy it as a "safe haven" asset as some investors do but rather as a hedge to their USD reserves.

The idea that because some CBs buy gold therefore retail investors should buy gold is a false point IMO.

 

If an investor outside of the US is after a hedge against the USD with exposure to gold as some central banks attempt to achieve with their reserve balances then a currency hedged ETF like QAU.AU may be a better option.

I've held some since March 24 this year (believing that the AUD had bottomed against the USD) and have seen a 17.4% return including cost and brokerage fees. Gold in AUD has seen a 7% return over the same time frame.

 

Thanks mate, I based my figures on my purchase on March 24th not 2024.

 

Conversely, I reckon that ETF would return greater losses than holding gold in a falling market because the value of the USD would rise in relation to the AUD.

 

I agree that it stems from a desire to derisk, for some nations it's the global sanctions eg Russia, for others like China, Saudi Arabia and those that have a large net balance of trade with the US it's more derisking from a protfolio perspective ie too many USD fx reserves. Some of that has gone into gold, but most has gone into alternative currencies incl the Euro, Sterling etc. Gold has declined markedly since the 60's largely due to the difficulty in transporting it as we are now in a digital rather than physical age - have a look at how porn has gone almost completely digital as an example (but I wouldn't know personally, it's what a friend reckons ), and digital transfers of wealth are safer and more efficient.



As far as a loss of faith goes, I believe that only plays a part in a small section of the retail sector eg most on this forum for example.

That being said, the short to mid-term outlook is rosy for gold.

 

Crystal ball time.

I knocked this up some time last year, the blue bars were my forecast price action, after I missed buying the lows in Sept/Oct 2023 as I was expecting a correction below 1700 which never materialised. Oh well. Looks like the highs arrived earlier than expected but the predicted price was pretty close, nearly 2700.

Now with Trump going to the White House he will replace JPow with an appointee that will be much more favourable toward his own policies ie read: growth as opposed to inflation control. So rates are going to come down faster than if JPow remained in office. This will drive inflation. I'm not sure when, maybe as early as Dec 2025 we'll see signs maybe later. As a result, I'm going to state that gold has reached it's high and the price action will follow a path similar to the grey bars plotted out below that I just added. Maybe the duration in the back 3rd may not be as drawn out though ie the bottom may come sooner than 2028 and not get under 2000. I'm hoping it gets under 2200, a correction in the band between that price and 1900 will indicate the time to buy back in. It may not be the bottom but it probably won't be far off hopefully. I'm selling my gold ETFs (just over 21% profit as I was late to the party, bought in March this year).

 

If I was to vote again I guess I would have to vote "Overvalued".

 

Here we go:

https://www.tradingview.com/news/DJN_DN20241111001991:0/

Yes the policies are inflationary, no I don't reckon it will stop The Fed because it will be a different Fed under a President intent on interfering in policy and with his own man in the job.