RE:RE:RE:No Vote We may see some upside next year from the takeover and lick our wounds.
TD Au outlook
Since our publication, weakness in the U.S. dollar has continued, with the tradeweighted index on pace for its largest monthly drop since last November. Presently at a three-month low, the index has dipped below its 200D moving average and a significant breach below would be bearish for the U.S. dollar and supportive of gold, in our view .
This is evident with the renewed strength in gold equities from the U.S. dollar's late-October peak, which has lifted the sector above its 200D moving average. Although the S&P/TSX Gold sector is on pace to close out the month up nearly 7.0%, we see significantly more upside going forward, given where the equities are trading relative to bullion.
Noteworthy to small-cap investors, we highlight the recent breakout in Canadian junior golds versus large-cap golds, reversing what was a four-month downtrend. We believe that this improved sentiment supports adding further gold exposure to our small-cap model portfolio. By raising Torex to 6.0%, our gold sector weighting increases to 16.3%, narrowing our underweight versus the S&P/TSX Small Cap (gold, silver, and precious metals) weighting of 19.8%