Gold is doing great in AUD and USD

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Since reaching a little over $1900USD per ounce in August 2011, the price of gold slumped in the following five years, reaching a nadir of $1046USD per ounce in December 2015. Since that bottom it has rallied over $200USD per ounce and its back with a vengeance!

From ZH:

Gold’s 16.1% surge in Q1 2016 is the best start to a year since 1974. Overall, this is the best quarter since Q3 1986 and is the best performing major commodity of the year.

The precious metal was the best performing asset in Q1…

Gold now has to breakout from its longer-term channel…

Actually a better technical view of gold is the monthly chart, which shows a clear falling wedge bullish breakout to start off 2016:

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For AUD holders, the news has been better, not just this quarter, but well for years! Gold has been an excellent hedge against volatility in the Australian dollar itself, swinging between support at $1300AUD and $1750AUD per ounce since early 2011, and recently almost broke out of said range:

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But thanks to some bizarre re-positioning on what can only be called a temporary dovish mood by the Federal Reserve, which has seen King Dollar fall 3.5% in the last month, the Australian dollar rose 7.5%!

This has sent the AUD price of gold down nearly 8% in March, but the timing could be right here to increase hedges both of a golden and currency nature as the selloff in USD is reaching very strong support, as measured by the US dollar index (DXY):

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Whatever the short term case, the longer term view for Australian currency holders of gold hasn’t changed. It remains a valuable insurance policy in a world and nation hell bent on using monetary policy alone to fix a debt problem.