BMO Canadian ETF Dashboard

— as of August 31, 2019 —

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Golden opportunity to gain exposure to gold

Russ Visch

Golden opportunity to gain exposure to gold

Macro Update

  • On June 25, gold rallied to a 6-year high of $1,423.44 (USD) an ounce in the spot market.
  • Low interest rates and slowing global growth have buoyed gold to multi-year highs.

Bottom-Up Impact

  • Centerra Gold is up 63.65% YTD and Eldorado Gold has rallied 87% YTD.
  • M&A activity in the sector will continue to build as the price of gold ticks upward. Barrick Gold acquired Randgold and Newmont acquired Goldcorp earlier this year.

The Technical Analysis
Gold broke out of a massive multi-year base recently. The close above $1,375 signalled the beginning of a new long-term uptrend and opened an initial upside target that measures to $1,705. However, given the size of the pattern it broke out of, it’s possible that gold equities may go significantly higher than that. The net result was a major breakout in the S&P/TSX Gold Index, representing Canadian gold equities, as well. The close above resistance at 1535 signalled the beginning of a new long-term uptrend with an initial upside target that measures to 1955 – 15% higher than current levels. Like the chart of gold itself though, this is likely just the first stop on what could turn out to be a multi-month uptrend.

bmo-gam_01technicalanalysischart848px_2019-07-02_ENG.jpg#asset:2943

Implementation
For exposure to gold equities, consider buying the BMO Equal Weight Global Gold Index ETF, (ticker: ZGD).

bmo-gam_02zgdchart848px_2019-07-02_ENG.jpg#asset:2945

For exposure to junior gold companies, consider buying the BMO Junior Gold Index ETF, (ticker: ZJG).

bmo-gam_03zjgchart848px_2019-07-02_ENG.jpg#asset:2949


Russ Visch

Golden opportunity to gain exposure to gold

Macro Update

  • On June 25, gold rallied to a 6-year high of $1,423.44 (USD) an ounce in the spot market.
  • Low interest rates and slowing global growth have buoyed gold to multi-year highs.

Bottom-Up Impact

  • Centerra Gold is up 63.65% YTD and Eldorado Gold has rallied 87% YTD.
  • M&A activity in the sector will continue to build as the price of gold ticks upward. Barrick Gold acquired Randgold and Newmont acquired Goldcorp earlier this year.

The Technical Analysis
Gold broke out of a massive multi-year base recently. The close above $1,375 signalled the beginning of a new long-term uptrend and opened an initial upside target that measures to $1,705. However, given the size of the pattern it broke out of, it’s possible that gold equities may go significantly higher than that. The net result was a major breakout in the S&P/TSX Gold Index, representing Canadian gold equities, as well. The close above resistance at 1535 signalled the beginning of a new long-term uptrend with an initial upside target that measures to 1955 – 15% higher than current levels. Like the chart of gold itself though, this is likely just the first stop on what could turn out to be a multi-month uptrend.

bmo-gam_01technicalanalysischart848px_2019-07-02_ENG.jpg#asset:2943

Implementation
For exposure to gold equities, consider buying the BMO Equal Weight Global Gold Index ETF, (ticker: ZGD).

bmo-gam_02zgdchart848px_2019-07-02_ENG.jpg#asset:2945

For exposure to junior gold companies, consider buying the BMO Junior Gold Index ETF, (ticker: ZJG).

bmo-gam_03zjgchart848px_2019-07-02_ENG.jpg#asset:2949