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.
There wasn’t much action in the gold price yesterday and, considering the volume [which was unbelievably light], I’m not entirely surprised. I wouldn’t read a thing into this price action…except that the New York low spot price was at the London p.m. gold fix at 10:00 a.m. Eastern…3:00 p.m. GMT in London.
But what really stands out, now that the scale on the graph has changed, is the big smack-down in gold on Friday. It didn’t look too big on Friday, but looms mightily on the chart now.
Silver is only slightly more interesting in the fact that there was a bit of a price spike between 10:45 and 11:00 a.m. in New York…which got sold back down. The New York low was at the London p.m. gold fix as well. Note Friday’s similar spike in price, which got dealt with in the usual manner.
The world’s reserve currency spent most of Monday within 25 basis points of its opening price in the Far East. The one rally of consequence began shortly before 9:00 a.m. in London…and hit its zenith precisely at the London p.m. gold fix…which was a few minutes before 10:00 a.m. in New York…3:00 p.m. in London…gold and silver’s exact low ticks in New York.
Coincidence? Not likely.
Of course, it nearly goes without saying that the gold stocks bottomed at the London p.m. gold fix…which were the lows for gold and silver…and the high for the U.S. dollar. The subsequent smallish rally in the gold price took the HUI up a bit over one percent…but those gains disappeared by the end of the New York trading day…and the HUI finished basically unchanged.
As I mentioned in my Saturday column, the CME did not update their Daily Delivery Report on Friday…and didn’t get around to it until Monday. That delivery report showed that 70 gold and 12 silver contracts were posted for delivery today.
Monday’s Daily delivery report from the CME showed that 448 gold and 1 [one] silver contract were posted for delivery tomorrow. Month-to-date there have been 10,097 gold contracts posted for delivery…and only 204 silver contracts. Yesterday’s report is linked here.
Neither GLD nor SLV had a report yesterday.
But over at Switzerland’s Zürcher Kantonalbank [for the week that was] they reported that their gold ETF declined a rather large 46,410 troy ounces. Their silver ETF rose a smallish 121,498 troy ounces. As always, I thank Carl Loeb for those numbers.
The U.S. Mint had some silver eagle sales on Monday. They reported selling another 711,500 of them…bringing the month-to-date total up to 838,000. They reported no gold eagles sales…and for February the total figure stands at 13,500 ounces sold.
For a change, the Comex-approved depositories showed an increase. On Friday they received 1,164,723 troy ounces of silver…and shipped out 212,981…for a net increase of 1,007,369 ounces of the stuff. The link to the action is here.
Before I post the stories I have for you today, here’s a graph that was sent to me by reader Peter Corlis. In his covering e-mail, Pete had this to say…”Here’s an interesting chart of the Commodities Price Index (CRB) vs. Baltic Dry index (BDI) to knock some sense into anyone who still thinks that rising commodity prices are demand related. Note the clear disconnect around the middle of 2010 just before the start of QE2.”
One has to wonder what this Baltic Dry Index would look like plotted against the old CRB…the Continuous Commodity Index, or CCI…as it is at new record highs…whereas the old CRB is nowhere near new highs.
While on the subject of commodity graphs…here’s one that reader U.D. sent around last night. This is the chart of Commodity price increases over the last 12 months…as of Feb. 1, 2011. Just remember that the government says that there is no price inflation. There is no food stuff that is not up double digits on this entire chart. It’s worth of a moment of your time.
