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.
Asia again moved gold up three dollars overnight to $1,377.00, where it was Fixed in London’s Fixing this morning. What is clear about gold’s moves in the dollar and the euro is that gold is not bound by either now. Gold at $1,377 is $5.75 up on yesterday’s p.m. Fix, but in the euro is down almost €3 the reverse of the last couple of days. Today the euro is recovering and stands at $1.3560. As we go forward in the gold market you will have to decide the currency you want to deal in to maximize your profits. Most people always refer to their home currency. This is the way to go because that’s what your profits are made in.
The gold price is still eating away at resistance and is getting close to digesting it all. But you can’t be certain until it has all gone. We heard reports that the fall in the SPDR gold ETF is due to the redemption [not sales] of their shares. This means the supply side is not being supported by the SPDR gold ETF.
Just ahead of New York’s opening the dollar gold price was $2 higher at $1,379.20.
Gold – Very Short-term
Gold is keeping up its attack on remaining resistance, but the outcome is still not a foregone conclusion. We repeat: Gold remains in a high-risk area where large moves could be made and very quickly. Which way? It could be either way in the very short-term. We did not see a vigorous day in New York yesterday so our expectations may well be seen today or even tomorrow.
Silver – Very Short-term
Silver was Fixed at $30.77 yesterday but is trading slightly lower than that level now at $30.65. The fact that New York did not see a vigorous day in New York yesterday tells us that the longer it trades at these tight levels, the greater the move it will make, but either way. As with gold, silver is in a high-risk area at the moment with a clear direction about to be given. Be ready for a vigorous day, if not today, tomorrow or next week.
Gold Price Drivers
Reports of explosive gold buying in China do not surprise us indeed it was forecast in our newsletter in our annual forecasts. It is unlikely to slow down either, for China remains unsophisticated financially. Inflation is high there and returns on bank deposits have not proved successful. The government has encouraged gold investments and a diversifying of holdings of bank deposits into gold. This allows for a far greater percentage of savings to find their way into gold, rather than other western type of investments.
We expect great numbers out of Chinese gold imports in 2011, well above those of 2010.
Food and energy figures are hitting nations worldwide now. As the situation worsens on this front, we have no doubt that they will eventually feed through to gold prices.
Currently, we are presenting in the Gold Forecaster, a series called “Financial Earthquakes”, covering the main crisis areas in the financial world and what they could lead to.
[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].
