Aside from the breakout of gold from a longstanding downtrend, a potential pick up in volatility in the global financial markets again perhaps by May 2016 will further support the demand for safe haven assets like gold. Intermarket analysis also points to a rise in commodities, particularly gold, as bull runs on fixed income securities (bonds) and equities (stocks) are already at their last legs. Gold along with gold-related stocks like Philex Mining Corporation (PX) and Lepanto Consolidated Mining Company (LC) will benefit because of this theme by the second half of 2016.
GOLD write-up from the Trading Edge Equity Advisor:
February 11, 2016
The ongoing volatility in the global financial markets brought about by several factors like the weakness in China’s economy, rout in the price of crude, rising interest rate environment in the US, to name a few, has led some investors towards the relative safety of gold since it is a physical asset. As a result of this renewed demand, the spot price of gold has actually breached the resistance of a multi-year downward sloping channel. Its rise above its resistance at 1,200, as you know, may attract more buying activities that may in turn carry the commodity higher towards its next hurdle at 1,400 to 1,433.
*Consensus target price or average target price given by the major foreign and local brokers of various stocks on top of index names are available in our Equity Advisor!
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