"Pass the Hot Sauce, the Rand is Cooked"
It has been a long time since the South African mining companies have been able to benefit from the rising price of gold in US Dollars while their reported earnings took a hit because their expenses were priced in Rands. That time is soon to pass as the Rand is forming an apparent head and shoulders top. As the Rand declines in value in relation to the US Dollar, earnings for the South African mining companies are likely to increase as wages and other expenses are paid in Rands.
What should a gold stock investor or trader be doing right now? You may want to do some homework and develop a list for yourself of mining companies with significant operations in South Africa. Harmony Mining (HMY) would be a good place to begin with as they are South Africa's 3rd largest gold producer as well as being the world's 6th largest gold producer.
Another interesting development is that the gold stocks are trying to make a go at getting a rally started. Be careful not to jump the gun unless you're an experienced trader with intraday internet access. We, at Thirdeyeopentrades, are waiting for a sector buy signal before putting our longer term capital back to work. Once the $XAU:$GOLD ratio crosses that red line we'll be back in the game.
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