
AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
The U.S. CPI data released last Thursday confirmed a downward trend in inflation. Coupled with dovish comments from the Fed Chairman, expectations for the Federal Reserve to start an easing cycle in September have risen sharply. The market now believes that the possibility of a rate cut in September has increased to 94%. With the anticipated rate cut, the price of gold has received a boost, recording its third consecutive week of gains last week and holding firmly above the $2,400 mark.
Analysts generally believe that minor fluctuations in gold prices will eventually be drowned out by the bigger trend, and hitting a new all-time high is just a matter of time. Last Friday, gold prices successfully held onto the crucial support level of $2,400 per ounce. Some analysts pointed out that this is a strong signal indicating that the consolidation phase in gold prices is about to be broken.
Julia Cordova, the founder of Cordovatrades.com, stated that as long as gold prices can stay above the double support level of $2,401.4-$2,405.6, this would represent a very strong trend, with her upside target at $2,582.5. However, if it falls below $2,385.9, it will re-enter consolidation, so everyone will be closely watching this level.
On Monday morning, gold futures rose by 0.75% to $2,439 per ounce, less than 1% away from the historical high.
Phillip Streible, chief investment strategist at Blue Line Futures, indicated that gold above $2,400 is a buy, but a stop-loss should be set at $2,350. David Morrison, senior market analyst at Trade Nation, is also optimistic about the potential for gold to rise on technical analysis. He said that gold prices are showing a bullish pattern, having repeatedly tested and held the support area around $2,300 since April, with the daily MACD indicator also lifting after gold broke through $2,400.
David Scutt, a market analyst at CityIndex.com, mentioned last Saturday that there is little resistance in the $2,400-$2,450 range for gold prices. Given that both the MACD and RSI indicators are sending bullish signals, buying during dips is more reasonable than selling rallies. Scutt thinks the biggest driver of gold prices is the potential rate cut in September. The rolling 10-day correlation between gold prices and Fed rate cut expectations is as high as 0.96, the same as its correlation with the US two-year Treasury yield. This means that when yields fall or are expected to fall, gold prices almost always rise, and vice versa.