The Party is over for Gold

This week delivered significantly improved performance, with our major winner being Sasol. We did take some losses, as is business as usual for when it comes to trading. Looking ahead, we think the party is over for Gold. That said, we had some decent trades and earned a few dividends here and there, so overall account balances are up for the week. Thank you Sasol for the big win!

Like any trading experience though, it was not all sunshine and roses. So, let’s look at what happened last week.

Last week

Macro Catalyst

The primary catalyst driving global markets this week was the release of US PPI and CPI inflation figures. Currently, markets continue to price in the risk of higher interest rates, which has weighed on precious metals; gold pulled back slightly after forming a distinct Head and Shoulders technical pattern but rallied today with the CPI data coming in as expected. This could mean that the party is over for Gold.

Closed Trades (Take Profit)

Sasol Ltd (JSE: SOL)

Trade Logic: Our strongest performer since launching the weekly recap series. We entered this trade on 26 August as the stock traded near previous swing lows (lowest print of R179.45). Following Wednesday’s sharp rally driven by higher crude oil prices, we elected to lock in gains and secure the profit.
Status: Bought at R180.00 | Closed at R227.00 (9 Sept). Delivered a +26.1% total return.

Standard Bank Group Ltd (JSE: SBK)

Trade Logic: Standard Bank was trading within a defined range between R313.00 and R338.00. We initiated a long position near channel support targeting a move toward the upper boundary. Our trailing stop was triggered on the ex-dividend date as the share price adjusted lower; however, the dividend yield offset the capital price movement to secure a positive net trade return.
Status: Bought at R315.39 | Closed at R309.45 (9 Sept). Dividend of R9.02, so our net proceeds was R3.08 per share.

Harmony Gold Mining Co Ltd (JSE: HAR) — Half Position

Trade Logic: Carried over from last week. As gold momentum began to stall ahead of key US inflation prints (CPI/PPI), we locked in a partial profit on half the position to manage event risk.
Status: Bought at R324.00 | Closed at R330.00 (9 Sept). Realized a minor profit (+1.85%).

Active Open Trades

FirstRand Ltd (JSE: FSR)

Trade Logic: FSR formed a clean bull flag pattern and confirmed a technical breakout, triggering our long entry.
Status: Active | Bought at R96.00. Position is currently in a slight profit. Despite intra-day volatility following earnings, the technical structure remains intact. Key lesson here is having your take profit on the account, as this jumped to our target, but then dropped down again very quickly.
Key Lesson: We were offered at R102.00 on Thursday and honestly we were a bit gready. We could have sold out at R100.00 when price was trading around there, although we held out for more. Sometimes, when you get a large move in a short period, it’s better to just take the money. We’re now looking to sell half the position at R100.00 and half at R102.00.

Growthpoint Properties Ltd (JSE: GRT)

Trade Logic: The R15.75 level established solid horizontal support. Following consecutive bullish retests over past sessions, we entered long with a favorable risk-reward setup.
Status: Active | Bought at R16.07. Currently showing a slight loss with a profit target set at R17.50.

Pepkor Holdings Ltd (JSE: PPH)

Trade Logic: Carried over from last week’s watchlist. Despite recent price pullbacks, declining selling volume suggests downside momentum is exhausting, supporting a potential mean-reversion bounce.
Status: Active | Bought at R19.72. Currently trading at a slight unrealized loss.
Key Lesson: We took this trade with only half size as it is not at very liquid stock. That will be helpful if this trade stops out as it will do much to limit out loss.

Exxaro Resources Ltd (JSE: EXX)

Trade Logic: Exxaro continues its strong upward momentum, benefiting from Rand weakness as a bulk coal exporter. Higher energy demand in Europe ahead of winter, coupled with drought conditions impacting regional supply, provides macro support.
Status: Active | Bought at R204.00. Currently trading at a profit.
Key Lesson: We had to chase here a little as we were bid a little too low. Our original bid was missed by literally 1 cent, so we had to increase our bid the next day to R204.00 to get picked up. This skewed our risk-reward a little, although we do still believe we are in the right trade here.

Mr Price Group Ltd (JSE: MRP)

Trade Logic: Carried over from last week. MRP bounced marginally off recent lows but remains constrained within a broader downward trend. Position is held with tight stop-loss parameters.
Status: Active | Shorted at R160.51. Slight loss, but close to breakeven.

Compagnie Financière Richemont SA (JSE: CFR)

Trade Logic: CFR completed a distinct head-and-shoulders top formation. We initiated a tactical short position expecting further downside expansion.
Status: Active | Shorted at R3,539.13. Showing a small profit.
Key Lesson: We entered with half size here as we were chasing a little and are looking to add to this trade if there is a bounce for us to add into. That said, if no bounce comes, we are happy to let our half sized trade move to target.

Mondi Plc (JSE: MNP)

Trade Logic: Morning call trade recommendation based on a bullish flag-and-pole continuation pattern.
Status: Active | Bought at R183.00. Currently at an unrealized loss; trade thesis remains active.

Discovery Ltd (JSE: DSY)

Trade Logic: Initiated last week following a breakout above its downward trendline. The stock has successfully retested the former trendline as support without breaking back down.
Status: Active | Bought at R264.14. Rallied on Friday after a very bad day on Thursday (retest of break-out), which means we are in a slight profit.

Reinet Investments S.C.A. (JSE: RNI)

Trade Logic: Reinet continues to trade at a substantial discount to its underlying net asset value (NAV).
Status: Active | Bought at R447.00. Price action remains range-bound. We are monitoring position sizing while remaining positioning for Reinet’s historical tendency toward rapid NAV catch-up rallies.

Harmony Gold Mining Co Ltd (JSE: HAR)

Trade Logic: With CPI data coming out as expected, gold dipped down significantly and we saw an opportunity to short some mining stocks.
Status: Active | Shorted at R328.96. Running at a slight loss due to gold price shooting up. However, we expect this to come down again after the gold price has eased.

Impala Platinum Holdings Ltd (JSE: IMP)

Trade Logic: Same idea as with Harmony as we wanted to short platinum stocks as well.
Status: Active | Shorted at R237.63. Running at a slight loss due to gold price shooting up. However, we expect this to come down again after the gold price has eased.

Closed Trades (Stop-loss)

British American Tobacco plc (JSE: BTI)

Status: Closed at a loss | Bought at R913.15 | Sold at R879.57.
Details: Despite strong long-term fundamental conviction, price action failed to confirm our thesis. We exited the position to redeploy capital into higher-conviction setups.
Key Lesson: It bounced a little bit after we closed, but we are glad to be out. This trade was a bit of a thorn in our side for a few weeks, so happy to free up margin for other opportunities.

MTN Group Ltd (JSE: MTN)

Status: Closed at a loss | Bought at R205.00 | Sold at R195.52.
Details: Initiated on a double-bottom pattern setup. Downside volatility triggered our stop loss before a minor recovery materialized.
Key Lesson: This one feels personal… it happens. We put our stop in the middle of the range (double bottom range) as is the rule with trading double bottom formations. The stock dipped just below the range mid-point, triggering out stop and leaving us behind. Our lesson here is not a new one… always put your stop just a little under the key level to give it some space to breathe. Lesson learned. We move on.

Harmony Gold Mining Co Ltd (JSE: HAR) — Remaining Half

Status: Closed at a minor loss | Bought at R329.99 | Sold at R326.47.
Details: Given heightened volatility surrounding US inflation data releases (CPI/PPI), we exited the remaining half to eliminate overnight gap risk.

Impala Platinum Holdings Ltd (JSE: IMP)

Status: Closed at a minor loss | Bought at R246.00 | Sold at R238.56.
Details: Closed out ahead of major US macro data prints to reduce overall PGM sector risk exposure.

Capitec Bank Holdings Ltd (JSE: CPI)

Status: Closed at a loss | Bought at R4,654.00 | Stopped out at R4,514.06.
Details: Entered on a flag-and-pole continuation pattern. An unexpected market reaction to a corporate trading statement prompted a large and quick drop, triggering our stop loss..

Conditional / Setup Watchlist

SPAR Group Ltd (JSE: SPP)

Trade Logic: SPAR has experienced a challenging year, with the share price remaining in a sustained downward trend, making it difficult to pinpoint a clear turnaround level. However, a substantial off-book block trade of 9 million shares was executed on Wednesday, suggesting potential institutional accumulation. While this does not signal an immediate buy trigger, it has piqued our interest, particularly given the strong price action observed yesterday. We are monitoring the stock closely for potential confirmation setups.

Thoughts on the week ahead

The possibility of an interest rate hike in the very near future has become a rather large theme in recent weeks. CPI data came in hot and markets are expecting a 90% chance of a rate hike on Wednesday. At present the relationship between Gold, Bonds and Interest rates is inverted to what it has been historically, meaning that when the market expects or sees higher interest rates, investors are favouring Bonds over Gold. We think that if the very high likelyhood of higher interest rates does in fact materialise, we could see a rather sharp negative reaction from Gold and other precious metals, hence our now short positions on HAR and IMP.

We also note a Head and Shoulders pattern on Gold.

Perhaps the party is over for the Gold and other precious metals stocks. We think this will be the dominant theme next week.

Economic Data

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