Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Overnight Asia lifted the gold price to $1,432. After London opened and the Fix was set at $1,432.50 and €1,008.16 gold traded higher $1,437.35 and €1,011.26 where it held through London’s morning. The euro held at $1.4212 where it had been in Asia before London’s opening. However, the feature of the day was the rising oil price at $118 for Brent Crude and $108 for West Texas. With little change in the Middle East over the weekend to the political situation there, the rising oil price appears to be due to either more speculation that the price is set to rise or genuine demand for oil rising globally.
What is worrying is the food and energy inflation is high and rising higher in a world where the ripple flows through societies at the poorer levels and on into the political arena. Few gold investors are expecting resolutions to the troubles of the world and remain solid in their determination to keep investing in the precious metals.
Gold – Very Short-term
The gold price is looking positive and will either hold or rise today in New York.
Silver – Very Short-term
Silver is broaching recent record highs and may well move to higher levels today in New York.
Silver & Gold Price Drivers
The subject of interest rates has moved forcefully onto gold investor’s screens. The idea that rising interest rates in the main economic blocs of the Eurozone and the United States will force gold lower is a popular concept that may well be put to the test soon. With the Eurozone scheduled to raise Eurozone rates up to three times this year investors have to ask the question, will that bring credibility to the value of the euro? Will this be sufficient to bring investors out of gold into the euro? Life is not so simple unfortunately. We do not have the space to discuss this in full here but will be looking at this in the next issue of the gold Forecaster and the Silver Forecaster.
We have never known a time in our lifetime when the future was more uncertain and possible global crises threatening to disrupt what calm there is in the decaying developed financial and political world.
– We noted that a major event on the political front is the U.N. resolution that is all but passed in September will demand that Israeli held Palestinian land [as per 1967] should be handed back. This is likely to bring significantly more pressure into the Middle East than we see at the moment.
– The U.S. is currently playing political brinkmanship with governments financing, indicating that prudent financial management is not the top priority there, but political maneuvering is. This hardly inspires confidence. Once the U.S. debt situation from the Federal government down to that of individual states suppurates the whole question of ongoing foreign support for the States will be subject to review.
– The Eurozone crisis seems to decay day by day, particularly now that interest rate rises will be imposed on already distressed economies there.
We have barely touched on what lies ahead out of sight ready to undermine systems in the developed world. All of these are gold positive. There is so little out there that is gold negative!
[The Gold Forecaster and Silver Forecaster are a “must-read” for all who want to understand why the gold and silver prices are moving as they are and why.] Subscribe at www.GoldForecaster.com or for silver at www.SilverForecaster.com].
