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 continued to support the closing prices in the U.S.at $1,384. London took these prices slightly higher before Fixing at $1,385.50. In the euro gold moved up well and was Fixed at €1,021.26 this morning in London. The dollar euro exchange rate is not an issue today. Gold is independent of both right now, walking its own road.
There was no change in the SPDR gold ETF holdings yesterday. COMEX is going long of gold.
Just ahead of New York’s opening the dollar gold price was at $1,386.0.
Gold – Very Short-term
Gold is still eating away at what’s left of resistance now, so we are close to a strong move that could go either way. Trading this market is not for widows and orphans and only the most resilient of Traders now. 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. Again we did not see a vigorous day in New York yesterday so our expectations may well be seen today or early next week. Brace yourselves!
Silver – Very Short-term
Silver is trading at the new recent record level of $31.77 as we write this and looks robust. We must warn you that silver follows gold, so now it could go either way in the short-term. New York did see a vigorous day yesterday hitting new highs. Despite that we are cautious and would like to see gold give a clear direction before confirming the way forward. As with gold, silver is in a high-risk area at the moment with a clear direction about to be given. Brace yourselves!
Gold Price Drivers
Two factors will indirectly affect gold market in the near term. The first is that a new twist is emerging in the multi-revolutionary area of the Middle East. Bahrain is situated on the other side of the Straits of Hormuz to Iran. A line between them straddles the oil-shipping routes out of the Persian Gulf. Bahrain is the main base for the U.S. military. Bahrain is 70% Shi’ite and 30% Sunni Muslim. The Shi’ites believe that state is subject to religion and the Sunnis believe that religion is subject to the State. If that revolution succeeds the risks for a change in the balance of power rises exponentially. In Saudi Arabia, while the Shi’ites are a 15% minority, they make up 75% of the population of the eastern oil producing area of Saudi Arabia. Despite the West’s calls for Democracy in the region the interests of the West mitigate against a democracy there. The U.S. is caught between a rock and a hard place there. If the revolution there does succeed watch the oil price ‘spike’. The potential for a sectarian facet to the Middle East revolutions rises too if there is a change in Bahrain. Uncertainty in the global economy would rise dramatically, alongside oil prices.
The State of Illinois is going to the market next week. If the banks can control the issues there will be no disturbance in U.S. debt markets. If Illinois fails in its quest, then the U.S. faces its own contagion as other States in a debt-distressed position may follow. The Republicans do not want a bailout of these States the Democrats do. Will this confirm that the debt crisis has jumped the Atlantic?
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].
