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.
As unrest escalated today in Libya the pressure was felt in the oil world with WTI up $2.17 to $97.50, Brent Crude up $2.26 to $108.00. Gold prices gained $17.50 to close in London at $1406.60/oz, with silver prices adding a huge $1.25 to close at $33.91.
Libya is one of the worlds major oil exporters so the concern about the outcome of the current civil unrest is most certainly warranted. As the news comes in a number of oil companies operating in Libya are starting to evacuate some of their staff as a safety precaution. We can only imagine that essential services will be maintained and that the ability to load oil tankers can continue, however, this is not a given. Libya produces about 2 per cent of the world’s oil production with exports running at approximately 1.1 million barrels per day and has reserves estimated to be 44 billion barrels.
From what we can gather from various news reports it looks as though the days of Muammar Gaddafi ruling Libya are about to come to a close.
Now, as the stock markets in north America are closed for holidays the only action has been in Asia and Europe, especially on the London Stock Exchange which was down today by 68 points. A guide as to how the mining stocks reacted to today’s price rises, we can see that for gold, Randgold Resources which was up 3.97% and for silver we have Fresnillo which was up 2.85%.
As we write all eyes are on the Sydney Stock Exchange and then the Singapore Stock Exchange to see if this upward move has any momentum, after we have published this article we will try and add any changes to the ‘norm’ via the comments section as we go through the day and into London once again.
In the mean time you can sleep tight!
Now we pop over to King World News where Eric King has, as per usual, a couple of cracking interviews, this is a taster for you:
With silver trading at a new multi-decade high trading above $34 and gold up almost $20 breaking above $1,400, King World News today interviewed John Hathaway, Senior Managing Director of the Tocqueville Gold Fund. Hathaway stated,
“What I strongly believe is that the amount of paper we are seeing traded in both gold and silver on the Comex and in the derivatives market is nonsense. It has to be something in the order of 100 to 1. The fact that the market is moving today when the Comex is closed tells me it is not New York that is doing this, it is physical demand.”
For those interested in silver they have this from James Turk:
“The backwardation that we have been talking about has now blown out to 73 cents, that is unprecedented. I find that number to be completely astounding! Where are the arbitrageurs? They could make a fortune. This suggests to me that the arbitrageurs are out of the market because they don’t have the physical metal to sell to deal with the imbalance.”
These recent events could be the ignition that drives both gold to a new record high and silver prices to yet more triple decade highs. If you are short please tread very carefully indeed as the outcome of this current destabilization is still unknown, casting a dark cloud of uncertainty over all us.
We can only hope and pray that these conflicts are resolved with the minimum of violence and that peace returns in short order.
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