AU Hedge?

Posted | 19/06/2013 / Views | 1343
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AUD Hedge?

We often point out that you buy gold and silver based on the USD denominated spot price.  So in the context of our earlier post re the Fed’s news tomorrow on whether or not to taper QE consider this: If they taper and interest rates rise you will likely see a fall in the AUD as the USD strengthens, so the value of your gold and silver increases independent of spot which will likely take a short term hit.  If they keeping printing money full steam, the USD may drop and up goes AUD, but spot will likely rally on any such news and counteract it.