Toronto Gold markets.
Gold prices are holding steady, but gold producer stocks are stumbling.
Take Barrick Gold, for example. The stock peaked at $55 and is now at $43. That is an over 20% drop from the peak.
Downside for Barrick appears to be in the $40 range, so it looks as though there can be an up to $3 additional downside for the stock. See chart.
The appeal for gold stocks may rise or fall depending on the risk for hedging against currency risks. Gold's biggest competitor is the US dollar. When the US dollar is more attractive, Barrick and other gold stocks on the Toronto markets fall.
The TSX falls accordingly.
According to a reuters report,
"If you look at silver and gold, they've been coming down
hard, and this is the area where a lot of investors had put
their money, so a lot of stop losses are being triggered," said
Azim Hajee, a senior market strategist at commodity futures
brokerage Lind-Waldock Canada.
Gold traders need to monitor many things, namely US debt (TLT, IEF or the 30-year, 10-year treasury ETF respectively). While gold prices cannot be predicted, the upward or downward trends tend to play out fairly steadily.
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