Gold Losses shine as Trump signals ‘Trade Truce’

Gold Losses shine as Trump signals ‘Trade Truce’

 

Gold Losses shine as Trump signals ‘Trade Truce’

 President Trump’s willingness to get around the negotiating table has sparked a risk on rally, with safe havens like Gold, Yen and the Swiss Franc pulling back.

President Trump said he would hold back on new tariffs and China would buy more farm products. He also indicated the US Commerce Department could decide if Huawei should be removed off the list of banned firms and can do so without government approval.

While we know he can change his tune very quickly, it does shift investor’s towards crucial US economic data this week (see calendar). This will give cues to whether the Fed will decrease interest rates later this month or not.

Investors who were long gold and gold shares should be banking some of the profits after the recent rally. The weaker gold price and strengthening Rand will see them on the back foot and at the mercy of the risk on rally.

Traders looking for ideas should look at Goldfields, AngloGold and Harmony as potential shorts. You should keep your position appropriate and a stoploss in place.

Below are trading levels for each of them.

  1. Goldfields – A weaker open this morning targets R65, and then R60. Short at R72 or higher and place a stop loss at a close above R75.00
  2. AngloGold – A trend reversal is underway and signals weakness towards R215.00 in the near term. Short above R235.00 to target R215.00. Stop loss at a close R240.00
  3. Harmony – Short below R30.00 as it falls back into a trading channel between R22.00 and R30.00. Target R22.50. Place stop loss at a close above R31.00.

On the three ideas above, it’s best to trail your stop loss lower as they move in your favour.

Trade ideas update

 

We’ve been calling the market well over the last quarter with 7 of our 10 ideas showing profits, we like to trail the stop losses to ride the profitable ideas for as long as it’s going in our favour as possible. See table below for updates.

 

 

 

Initiated Ticker Side Open Price Current Price Gain Comment
19-Mar WSL Buy 1,50 1,40 -6,67% Open – Long Term
09-Apr ACG Buy 3,74 3,82 2,14% Open – Long Term
14-Apr EOH Buy 14,00 19,46 39,00% Stop loss at R18,00 to lock in 28,5%
21-May NPN Buy 3000,00 3519,20 17,31% Stop loss at R3300,00 to lock in 10%
28-May SOL Buy 360,00 347,35 -3,51% Open – Long Term
03-Jun TKG Sell 94,00 91,14 3,14% Stop loss at R94 and ratchet lower as it falls
03-Jun DSY Buy 140,00 151,63 8,31% Stop loss at R145,00 and re-enter at R140,00 if price dips.
10-Jun USD/ZAR Sell 14,83 14,14 4,84% Final Target R13,85
10-Jun NTC Buy 18,50 17,83 -3,62% Open – Hold
23-Jun BID Corp Sell 315,00 303,07 3,94% Place stop loss at R310.00 to lock in small gain

 

 

 

Last Chance to invest with 100% downside protection

Last week we highlighted the two below structured products that are closing to new business on Friday 5 July. The stronger Rand will assist in creating a better entry point.

 

Structured Product 1: Offshore Enhanced Growth

The enhanced growth structured product gives you a minimum return of 18%, 100% downside protection and flexibility to include it in retirement portfolios. Minimum investment is R100,000

 

Structured Product 2: Geared USD Return

Get diversified exposure to the S&P 500, EuroStoxx and Nikkie with a guarantee of 103% in USD through this listed product. You have 100% downside protection. The targeted duration is 3.8 years. You will receive double the index return, but its capped at a maximum total return of 34%. Minimum investment is USD18,000.

 

If you are interested in any of the above structured products, please contact Hempas, Roche, Guy or Gavin.

 

The week ahead:

  • Local: Business Confidence Index (01/07); HSBC Whole Economy PMI (04/07)
  • Results Due: EPS, SNH (05/07)
  • LDT (02/07): CTA, FBR, NTC, SCD, SSS

Other Economic data releases of interest…

 

  • Monday: Manufacturing PMI (UK); OPEC Meetings (All); ISM Manufacturing PMI (USA); NZIER Business Confidence (NZL)
  • Tuesday: Cash Rate, RBA Rate Statement, RBA Gov Lowe Speaks, Trade Balance (AUS); OPEC-JMMC Meetings (All); FOMC Member Williams Speaks (USA)
  • Wednesday: ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI (USA); Services PMI, MPC Member Broadbent Speaks (UK); Trade Balance (CAN); Retail Sales (AUS)
  • Thursday:
  • Friday: Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate (USA); Unemployment Rate (CAN)

 

Retirement Solutions

Do you have an RA policy? Are you nearing retirement? Do you know how your investments are performing? Are you still paying high fees on your long-term savings?

As a leading provider of new generation investment solutions for pre and post retirement, we can reduce your fees by 60% or more!!

To ensure you have the best solution contact Gavin McCarter to set up a free review.

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