Bad Day for the ASX but a Good Day for Gold


It should be an ugly one today on the ASX. However you might think of it as a chance to buy gold companies on a correction. The local market will follow Friday’s awful day on the Down, when the index closed down over two percent. But gold shares are in vogue.

Something to watch for on the ASX/200 is how the index responds after today’s initial wave of selling. The chart above, courtesy of Yahoo, shows the index over the last two years. The red line is the 200-day moving average and as you can see, it’s mostly up.

The weak start to the year has caused the index to lose some momentum. And stepping away from the technical analysis for a moment, you have to wonder what can help it regain the positive momentum. It’s not likely to be news from America, where the weak job market sparked Friday’s nausea.

Recession. The word is on everyone’s lips now. But it’s becoming apparent that this latest American recession won’t be like a mild head cold. It could put a serious dent in consumer demand from the world’s largest consumer. At the very least, that would be commodity price bearish (base metals) and lead to a lower Rio and BHP.

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.

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8 years 9 months ago
Hello everyone. All this reminds me of a bible passage that I read the other day and freaked out over. It’s more like a blow by blow account of what’s happening right now, rather than something that was written thousands of years ago. But you know what it says in the bible “God sees the end from the beginning” Anyway, the bible passage I refer to is Psalms 9: (versus 15-20) which says: “The heathen are sunk down in the pit that THEY made: in the net which they hid is their own foot taken (hint- dodgy lenders, greedy people,… Read more »
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