Exclusive Gold Price Forecast for 2014 with Invast Financial Services

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EXCLUSIVE GOLD PRICE FORECAST

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This guide we look at the following topics:
1.0 Your way of thinking determines results
We teach you how to think like a pro trader, get
organised and ready to trade.
2.0 How we think about commodities at Invast
We shed our insights into the fundamentals behind
gold.
3.0 Mining is becoming harder and more expensive
We run through recent evidence from suppliers which
suggests gold prices are heading higher.
4.0 What an ASX listed CEO told us recently
We invited the CEO of an ASX listed miner to our
office last year, he spoke to our clients and we discuss
what he said.
5.0 What the charts are signalling
We show you how our clients have been benefiting from
our weekly insights and invite you to take part in our
exclusive live market webinar on 7 May 2014 which will
focus on the gold price.

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Remember to register for the gold webinar!
This guide is a roadmap for trading gold but if you are after the latest detailed trading and technical levels
then it is imperative that you register into our exclusive live market analysis session on 7 May 2014 hosted by
our Senior Technical Strategist Vito Henjoto. Click here to register before reading on!
Invast Insights is a client only weekly newsletter which was launched in 2013. It helps traders and investors
position their trades and portfolios regardless of what instrument or security they trade. This report is an
exclusive version of Invast Insights newsletter made available to you only complimentary.

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1.0 Your way of thinking determines results
The purpose of this guide is to help plan your thoughts and open up your mind to trading opportunities. Commodities like gold, silver
and copper have been traded for thousands of years. Some have amassed huge wealth through this trade; others have lost
everything they owned. The difference between a winner and a loser is their way of thinking. People tend to service their cars every
few thousand kilometres, they refurbish houses and format mobile phones or computers after some time.
Likewise, your brain needs to be rewired every so often, so that you see opportunities and filter
out the noise in markets. Gold is just one key market but recent price action has us excited. We
want to share these views to you. As a trader or investor, your brain and your way of thinking is
your most valuable asset. The greatest risk in this business is falling behind in your way of
thinking.
Traders need to mix with the best and talk with the best to become and remain successful. Some might find solace in being isolated,
but this is only temporary. The market is a collection of buyers and sellers, each with personalities, thoughts and emotions. Millions
of traders participate every single day in markets. It doesn’t matter if you have been trading over a lifetime or just about to enter the
market for your first time. Your way of thinking will dictate your success. Your way of thinking will give you the edge over the
thousands of other traders in the market place who want your money. At Invast, we aim to bring only the best ideas and
opportunities to our clients by articulating our way of thinking. Gold is currently looking promising, we’ll explain why below.

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Those who want a list of quick numbers without changing their way of thinking in 2014 will be disappointed in this guide.
We apologise from the outset. This isn’t a magic forecast – we don’t know exactly where markets will go BUT we try our
best in putting together some sensible assumptions and from that, we find where the risks and rewards are this year. You
should be aware of this when reading market forecasts – there will never be a forecaster who predicts outcomes perfectly
over a period of time. Analysts who believe their own numbers blindly are either fooling themselves or lying to you.
Experienced traders will most certainly agree with this. Some might get lucky over a period of time but most will eventually
blow up.
Consider this. The most successful traders, analysts, brokers and investors in the world are those who have a philosophy, a
system by which they base their decisions. If you open up the BRW Rich List and skim through the 100 richest people in
Australia, you will see that most have built their wealth through their way of thinking – being able to seize opportunity
while balancing risk. For every 100 people on the BRW Rich List there will be millions of others who have attempted the
same business outcome and failed. The difference between the winner and loser is in their way of thinking.
The greatest investment you will make in 2014 will be in improving your market knowledge. When was the last time you
actually invested in your education as a trader? Think of all the time and money you spent in 2013 and then write down
the amount of time and money you spent educating yourself. How much time or money did you spend on housing, food,
clothing, bills, entertainment etc compared to the investment you made on improving your skills as a trader. Many will
realise that they have under invested in themselves.

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Well that is about to change. At Invast we are helping you start 2014 with a fresh approach. We released our 2014 Forecast
Guide in January and we now release this guide into where we see the gold price going. We also publish weekly client only
research with some excellent recent results.
This guide is free of charge, what is required from you though is an investment in time. We want you to use this guide as a
first step in a long process of reinventing yourself to become a successful trader. The guide is accompanied by several
seminars and webinars which Invast will be hosting. It is paramount that you attend these to find out how we think about
gold and how we can help you change your way of thinking to hopefully become successful this year.
Before we get into the actual numbers and forecasts, we want to remind you that in the Chinese zodiac 2014 is the year of
the horse. The symbol on the first page of this report is the Chinese word for horse. We aren’t experts in astrology but we
like to draw some simple comparisons with everyday life. Horses are born to either race or travel and no matter how
integrated they seem to be, a horse’s inner self remains powerfully rebellious. They are open to challenging the status quo
and have boundless counts of energy and ambition. Horses are generally considered in Chinese astrology as being hot
blooded and impatient but also gifted and intelligent.
With that in mind, ask yourself what type of horse do you plan to be in 2014? The type that is quick to act and slow to
listen, bolting too hard without considering that pace of the race of challenges ahead, or will you be the horse that is
sensible and able to contain their energy with the aim of finishing first among the pack as a champion?

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2. How we think about commodities at Invast
Now to the main point – how we think of gold. At Invast we tend to think of commodities in two buckets - first the
industrial commodities that are used in the production of goods and services and secondly the currency commodities like
gold and silver which are held for different reasons, usually a storage of wealth. Before we mention gold, we want to walk
through what we think of other commodities to help give you an understanding of how we think. We didn’t just wake up
one day and make up a magic figure around where the gold price is going. Our view on gold is part of an overall thought
process.
One of the most important indicators we watch on a daily basis is the copper
price, not because we are obsessed with the colour of the metal or its
properties but because of its importance as the key lead indicator for all other
industrial commodities. The history of copper use dates back to the beginning
of mankind. If you are reading this note on a computer or mobile device,
chances are that extensive copper has been used in the components behind
the screen showing you this text.
Most experienced traders and investors refer to copper as Dr Copper - reputed to have a Ph.D. in economics
because of its ability to predict turning points in the global economy. Copper is very widespread in its industrial
application. It finds itself in many different products from homes and factories, to electronics and power
generation and transmission.

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There are various ways to generate electricity but not many ways to transport the electricity from the generators to
households or businesses except copper and other similar substitutes.
Generally, a rising or stabilising copper price suggests the market anticipating increased industrial use and also the
opposite for when the price is falling. Sure, copper is not necessarily significant to the earnings composition of large
companies like BHP Billiton or Rio Tinto, but it does have a spill over effect on the way these shares trade. Take BHP as an
example - the largest listed company on the Australian stock market and one of the largest mining companies globally in
terms of revenue. Despite being one of the largest producers of copper globally, it only generated 17% of its earnings from
this commodity. Note gold doesn’t even rate a mention here. We’ll discuss why later on.
Table: BHP's 2013 earnings by commodity classes published to the ASX on 20 August 2013.

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BHP also generates around 53% of its earnings from iron ore which is a key input in the production of steel. Mills don't just
produce steel for the sake of it (we hope not anyway), they will usually change their patterns based on underlying demand
for new buildings which will correspond with the copper price too. The reason we watch copper so closely is because it is a
much more transparent market than iron ore.
Copper is openly traded on large exchanges like the London Metals Exchange (LME) where we not only see the price being
traded but also stockpiles gathered to fulfil physical delivery among traders when required. Iron ore on the other hand is
usually more volatile in its pricing and historically has been subject to annual negotiations between producers and steel
mills, only recently become spot traded in a fairly thin market.
Basically our point here, without going into a full academic analysis, is that copper matters and the copper price is similarly
watched by large fund managers who allocate their funds into stocks based on spot copper price movements. The
performance of mining stocks on the Australian market for example correlates very closely with how the copper price trades.
Therefore, it is an easy reference point for us in judging where the stock market is likely to trend over a certain period.
So who are the key consumers of physical copper? The simple answer is China matters. There are various estimates out
there but most tend to agree that at the moment, China is consuming around 40% of total global copper production. This
might sound large on face value but on a per capita basis, China is consuming around 5.4kg per capita compared to North
America which is around twice that.

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So even though China is the largest single swing factor, it is by no means using as much as other
developed economies when compared to its population size. It may never do so, but we just want to
paint the picture that China is important to where the copper price goes from here.
Being the largest factory in the world, China's copper consumption goes into its own domestic use
but also in making products which it exports to the rest of the world. As the global economy comes
out of a recession, consumers in the United States, Europe, Japan and other emerging economies
are likely to buy more Chinese products which will impact copper demand.
India is also important and depending on which estimates you believe is currently consuming
around 0.5kg of copper per capita despite having a population of comparable size to China. India's
power needs are likely to continue growing over the next decade and it will need to invest in its
electricity network in order to keep up with demand, meaning more supply for copper.

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In 2014 we expect the copper price to recover after testing the important US$3/lb level where it has previously found
major support. Over the medium term, Copper producers continue to face production difficulties and the low prices seen
in 2013 have forced many producers to cut back production, in turn having an impact on supplies as measured by the
London Metals Exchange (LME). Below is a chart of where stockpiles finished off 2013 – coming off record high inventory
levels not seen for the past five years.
Image: Copper price action during March testing US$3/lb level. Source Invast MT4.

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Copper producer Oz Minerals (OZL) disappointed the market several times in 2013 when releasing its quarterly production report. While most of
the discussion was around how poorly the miner has performed, our interest was more around the trends within copper mining. Oz Minerals
owns the Prominent Hill mine which is located 650km North West of Adelaide in South Australia. It is perhaps one of the most attractive
geographies for mining – an open pit mine, a newly developed underground mine, access to railway and low sovereign risk.
The mine was first discovered in 2001 and has been in production since early 2009. Oz Minerals
has spent many years and plenty of cash to get the mine up and running but over the past year the
rate of production has fallen from above 1000,000 of contained copper down to around 80,000-
90,000 tonnes this year. It is very important to get the full scope of Oz Minerals’ operations –
please watch the following corporate video to get an idea of the scope of the mining operations
and growth plans already in place. We aren’t talking about an insignificant copper producer at all.
This business matters. The problems Oz Minerals are seeing in its production capacity are
consistent with what others are reporting in the industry. Our rationale is that if a world-class
deposit like Prominent Hill located in Australia is struggling to grow production, the ability of new
copper over the next few years to fill the growing demand will see spot price appreciation. This
point is crucial. Emerging copper producer Discovery Metals (DML) which set an ambitious goal of
becoming the next Australian mid-tier producer out of Botswana has seen its share price fall from
an all time high near $1.80 to around $0.03 as of the time of writing.
Discovery had been the talk of the industry as it ramped up into production from development; even attracting a takeover offer from Hong Kong
based Cathay Pacific Group which its board rejected. Today, the business is struggling for survival, at the mercy of its banks as lower copper prices
and production problems have caused a cash crunch.

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3. Mining is becoming harder and more expensive
So what does this all have to do with gold? One of the things we didn’t call too well in 2013 was the fall in gold price. We
purchased gold in our Wealth Creation portfolio in September but we cut our modest losses early and rectified our
decision with some deeper analysis. The first step in becoming a successful trader is to admit your mistakes. We’re starting
off telling you that we didn’t time our gold trades too well last year. But despite the small losses, we are encouraged by
what we see and if anything, sitting on the sideline has helped us become even more bullish.
Usually the earlier you admit your mistakes, the better your long term performance will be. We published views in client-
only Invast Insights reports in September and October 2013 basically saying that around US$1250-1280 an ounce the gold
price should find support. In late September 2013, we went through and looked at key global miners like Newcrest Mining
(NCM) and pulled out what their marginal cost of producing an ounce of gold actually is. You can find that report by
clicking here.
Most of the analysis we read is that gold is becoming harder and more expensive to mine but this hasn’t stopped the price
from continuing to fall. Newcrest Mining (NCM), one of the largest gold miners in the world, has seen its share price
collapse this year and its “all-in cost” of producing gold rising to above US$1150-1200 an ounce. Our fundamental view
was that if this is the cost of production then the gold price should find at a floor near this level.

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This view is not incorrect, as we write the gold price is actually moving from around
US$1250 an ounce towards US$1350 with solid support forming. We called a floor in
the gold price at the beginning of the year when most analysts were calling for gold
to fall below US$1000 an ounce. Our views went live with Bloomberg TV, you can
watch by clicking the image to the left. It was a brave call at the time, but we stuck to
our guns and maintained facts. A few months on and gold is finally starting to move.
Remember we didn’t get our gold calls right in 2013. Most analysts and investment advisors or technical analysts find it very
difficult to admit their mistakes. But we haven’t, we’ve moved on. The future is more important. Rather than trying to justify
why our past analysis wasn’t still correct, we think our call in September was lousy. It’s not that it was incorrect, but it just
didn’t really add any value to you, our client. Our purpose though is to add value to our clients trading – not necessarily
dwell on what a fundamental value SHOULD be in isolation.
Before we move onto the next section of this report, we summarise our view as follows. The production of gold is become
harder and harder. This is what drives us to think that gold is set for another upward rally in the second half of this year. Global
gold production is likely to peak in 2013 at around 3,000 tonnes compared to 2,861 tonnes in 2012. That will eventually
provide a floor to the gold price in the US$1000-1100 an ounce range. We recently spoke to two ASX listed CEOs who are
running mining companies, their views are below.

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4.0 What an ASX listed company CEO told us recently
We invited Garry Lewis – CEO of ASX listed Robust Resources (ROL:ASX) – to our office in September last year. He
presented to a full house of guests and clients across a range of issues, including his view on metal prices. Lewis spoke
mainly about his company’s growth aspirations, the previous success in the portfolio of ore bodies the group invested in
and the ability to bring on capital at the right time to help crystalise shareholder value.
Robust Resources (ROL:ASX) CEO Gary Lewis at the Invast seminar room

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There is no doubt that Robust Resources among many other junior explorers have been heavily hit over the past few years as appetite for mining
growth projects hits record low levels from the previous mining boom.
Robust Resources is an Australian-based, Indonesian-focused miner exploring for precious and base metal mineral deposits in Indonesia and the
Philippines. On Romang Island, Indonesia, Robust has been exploring two projects, the southern Lakuwahi Project and the North Romang Project,
since December 2008. Since that time Robust has undertaken an extensive programme of diamond core drilling, gridding, geological mapping, soil
sampling and geophysics.
Robust also recently acquired the rights to an advanced portfolio of exploration and developments projects in the Kyrgyz Republic. The most
attractive for us is the Andash copper-gold project which contains a measured and indicated mineral resource size of 680k ounces of gold and
170m pounds of copper at very high grades. According to Lewis, this will put a strain on supply in the coming decade. Not all commodities will
witness this – iron ore for example has been expanding for the past decade and demand is coming from a huge base. The story is different for the
metals though, as mining costs rise and investor appetite for funding riskier projects wanes, the amount of supply coming onto the market will
mismatch future demand.
Lewis spoke about the increasing difficulty in bring on large, full scale projects in the current market environment. His company has rights to some
very attractive parcels of land across the Asia Pacific region but developing these projects remains sensitive. Even in Australia, large full scale
projects like BHP’s Olympic Damn expansion was put on hold last year due to the numbers not stacking up in the right order.
Lewis thinks there will be pressure on metals, particularly base metals, in the coming decade. Gold is slightly different to the industrial
commodities but it also has its own set of demand characteristics. The chart below echoes Lewis’ comments; it comes from Rio Tinto as part of
their extensive research in to the commodities space. It shows the supply constraints in the copper market and the challenges Rio Tinto currently
sees going forward.

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The Rio Tinto charts show that grades are falling even at the most economical copper mines globally. The average grade is now slightly above 1%
which means that 99% of the ore mined does not contain copper. Disruptions are rising, companies are having to spend increasing amounts of
money to ensure their current mines are up to scratch and this is unlikely to get better going forward. Unless there are some major metal body
discoveries in the next few years and well within infrastructure capabilities, the industry is likely to see persistent disruption to supplies. As gold and
copper anomalies are generally found together, this supply outlook is consistent for both metals.

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5.0 What the charts are signalling
On 7 April 2014 we wrote the following note to our clients. Invast clients enjoy extensive weekly research in a publication
called Invast Insights. The paragraphs below were only a small sample of much longer research in the weekly report. Our
comments on gold at that point in time were:
“We have been bearish since October - November last year and while we haven’t seen a drastic sell off in the market as of
yet, technical analysis still points to the possibility of gold tracking lower this year. The rally we saw at the beginning of the
year was driven by risk aversion in the market, as emerging market crisis and civil unrest in Ukraine unfolds.
Safe havens like gold gain on the back of this unrest, although in this case gold was quickly dumped once these crises are
over and economic growth globally continued to improve. It only took the market two weeks to wipe off 50% of the gains in
the first quarter of 2014. In addition to this, technical analysis of gold remains bearish in the long term; even as gold pushes
back close to 1400 key level.
In the short term, we are likely going to see a short recovery towards 1310 and 1340, both of which are the 23.6% and
38.2% Fibonacci retracement of the Q1 rally. Daily oscillator is currently indicating a slight oversold market condition, and
we anticipate this pullback up to play out in the first two weeks of April 2014. Downside supports are located at 1280
followed by 61.8% Fibonacci level at 1262.”

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We’re glad to say that this analysis was right on the money in the two weeks following our report. The gold price remains in a sideways trending
pattern and the notes above are now a few weeks old, something significant is emerging on our technical indicators in the gold market and we
want to give you an exclusive opportunity to find out what we are thinking.
That is why we are dedicating a live market analysis webinar on the gold price exclusively for readers of this report. During the session, our Senior
Technical Strategist Vito Henjoto will be running through the new developments which have just emerged in the gold market, he will talk through
his analysis with a full simulation of his trading platform. You will see exactly where he sees support and resistance levels and he will be trading
live on Invast’s cutting edge trading platforms to help position you ahead of the market.
Click here to register into this exclusive Live Market Analysis session which will be held on Wednesday 7 May 2014 at 7PM EST. This will be a very
popular session, our recent webinars have booked to capacity so it is imperative that you register for this event by clicking the link above.

2020
Invast Research Analysts
Esho has previously held senior investment research roles with Nasdaq listed Morningstar Inc. and
UK based City Index Group. He is a regular contributor to Sky News Business, CNBC and Bloomberg
TV among other media partners.
Peter Esho
Chief Market Analyst
Email: pesho@invast.com.au
Phone: 02 8036 7568
Henjoto began his involvement with currency trading back in 2004 as a full-time trader and
gathered a vast amount of first-hand experience using technical analysis and in particular the
Ichimoku Kinko Hyo technique. He has mentored hundreds of traders and has been a leading
analyst for several FX firms globally.
Vito Henjoto
Senior Technical Strategist
Email: vhenjoto@invast.com.au
Phone: 02 8036 7569

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Have you registered for the 2014 Forecast Guide?
Click on the link below to download your copy of the Invast 2014 Forecast Guide.

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Go to www.invast.com.au/insights to get a
complimentary 4 week trial and receive the latest
insights as they are published to our live clients.

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Disclaimer
Please note that you are receiving this report complimentary from Invast Financial Services Pty Ltd
(AFSL 438 283). Invast staff members may from time to time purchase securities which are
included in this or future reports. The authors of this report may or may not be holding a position
in the securities mentioned. Please note that the information contained in this report and Invast's
website is of a general nature only, and does not take into account your personal circumstances,
financial situation or needs. You are strongly recommended to seek professional advice before
opening an account with us.
General Disclaimer: This newsletter contains confidential information and is intended only for the
person who downloaded it. You should not disseminate, distribute or copy this newsletter. Invast
does not accept liability for any errors or omissions in the contents of this newsletter which arise
as a result of downloading this newsletter. This newsletter is provided for informational purposes
and should not be construed as a solicitation or offer to buy or sell any financial product. Invast
Financial Services Pty Ltd is regulated by ASIC (AFSL 438 283 | ABN 48 162 400 035).

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Risk Warning: It's important for you to read and consider the relevant Product Disclosure
Statement, and any other relevant Invast Financial Services Pty Ltd documents before you
decide whether or not to acquire any financial products listed in this email. Our Financial
Services Guide contains details of our fees and charges. All these documents are available here
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leveraged products and carry a high level of risk and you can lose more than your initial deposit
so you should ensure CFD and Foreign Exchange trading meets your personal circumstances.
General Advice Warning: Being general advice, this newsletter does not take account of your
objectives, financial situation or needs. Before acting on this general advice you should
therefore consider the appropriateness of the advice having regard to your situation. We
recommend you obtain financial, legal and taxation advice before making any financial
investment decision.

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