Far East Capital Newsletter
Gold is looking well poised as profit taking was dominant elsewhere
28 Jan 2018

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Gold is looking well poised as profit taking was dominant elsewhere

The week opened with more selling of lithium stocks as the market digested the new flow, but then there was a good rally. That would have pleased the true believers, but unless the sector moves to new highs, we could be seeing the start of the downturn.
Overall the Australian market continued in a correction pattern, probably because the strength of the market in the holiday season was too good to not take advantage of. It is always healthy to take part profits. The next issue is whether this prudent approach conflicts with the concept of profit maximisation. We will soon know if the market wants to resume its upwards trajectory.
There is a feeling that gold may be preparing itself for an upside breakout - at least that is what technical analysts are telling us. Money is flowing into gold equities, evidenced in the institutional end with stocks like Evolution and Northern Star hitting new highs. If this breakout is confirmed over the next few days we could see a surge in all gold stocks.
 

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