ANZ: Stay long gold

Via ANZ:

  • prospects of an imminent coronavirus vaccine, the likelihood of a strong global recovery and a rally in risk assets continues to improve …  could take some shine off from gold’s haven appeal, we don’t think it will scuttle gold’s current rise.
  • in the bull market of 2002–07, when the S&P 500 index rallied more than 75pts, gold surged 125% to USD750/oz.
  • Our gold valuation model suggests current prices are undervalued, while comparisons with copper and oil confirm this.
  • We believe gold’s other main drivers, real interest rates and the US dollar are likely to provide support over the coming year. Using the US Federal Reserve’s forecasts for rates and inflation, real rates should continue to push into negative territory. And a strong global growth pulse should see the USD weaken further.

I agree. As I say, gold is always volatile. I note in passing that BTC has now broken as well:

Though just why the BTC/gold relationship should hold is not clear to me:

Houses and Holes
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Comments

  1. DLS – has Bitcoin broken? Not a post from you on bitcoin in ages since it’s been rallying and goes against the bitcoin will collapse ideology you’ve been pushing the past 3 years but the second it has a long overdue correction you’re calling it broken. You need to move past your ideology and accept the price for what it is and rightly or wrongly, it’s here to stay.

    Second, I agree with you on Gold. No-one should probably ever sell gold; you cash in bullion and the exchanges screw you on spread, and you sell your ETFs you only pay capital gains tax (hopefully). Better to just sit on it and HODL for the super long term.

    • Its barely even a correction, not by bitcoin standards anyway. On the weekly chart its basically a mere blip.

      • Touche x3 posts this month. I stand corrected!

        I agree very long term but just like Aussie housing being far more resilient than anyone thought, we could be having the same debate in another decade whether crypto should be outlawed due to regulatory ineptitude. The very long term view is probably correct but for now it is worth at least one post per month I reckon. Along with digital currency as a general.

      • My question is though, if you cash in your physical bullion is there any way for the ATO to track you for CGT reporting obligations? Question for the wider MB community.

        It would have to come down to what information the dealer/exchange must legally collect from their customers selling their bullion. I’ve never sold so I don’t know but I am curious.

        • peterbruceMEMBER

          If you keep each transaction below $5000 per day it is a cash transaction and no record kept. This applies with a well known bullion sales place in SA that I have dealt with for years.

  2. I have been keeping my eye on ALK, (gold producer). It’s now under $1.. thinking of dipping my top in for a long term play. Any others out there worth looking at?

    • SVL gold exploration and silver mine in final stages of approval (I know not gold ). Their AGM presentation was out today (ASX) should tell you all you need to know. I hold. As always DYOR.

    • Yup, but only $500 worth. Still haven’t sold it. Bought it for their Vic gold prospects so if they end with a world class asset at Julimar, and one at Karri Karri I will be dancing in the street.