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.
Gold closed at $1,829 in New York yesterday then slipped to $1,823 in Asia before slipping further at the London Fix to $1,815.50 in the morning, still $2 higher than yesterday afternoon’s Fix. That’s the interplay of the different markets worldwide. In the euro the gold price was Fixed at €1,270.74 up €6 on yesterday. At the time, the dollar : euro exchange rate stood at €1: $1.4287.
Yet again the Yen is barely changed at Yen 77.07 slightly weaker than yesterday and the Swiss Franc stronger again at 0.7998. Intervention continues to fail.
Gold ahead of New York fell back slightly after rising initially to $1,822.60 and in the euro at €1,279.53 €10 stronger today.
Silver was slightly stronger today but solid as a rock at $41.67 after yesterday’s $41.29, ahead of New York’s opening.
Gold (very short-term)
The gold price should be steady to stronger, today in New York.
Silver (very short-term)
The silver price should b e steady to stronger, today in New York.
Price Drivers
This gold price just does not want to obey all those Technical analysts calling for a pullback to $1,500. Investors have to do more than just ask “why?” They have to understand why. These days it’s no longer enough to have a superficial knowledge of the gold market you must have your finger on the pulse or get them burned. With swings of $100 up, $200 down then $100 up and for the gold market to go steady this week needs to be understood. So will gold fall if the U.S. stays stagnant or moves into a recession? We think not. It is about the dollar, to some extent, but not as directly as you think. It’s more to do with confidence in the dollar. And not confidence that Americans or Europeans have in the dollar but about the confidence the rest of the world has in the dollar. To understand that you need to take the U.S. flag from in front of you and take a hard look at the cold realities seen through foreign eyes. After all, the gold price is a thermometer of the world’s monetary system not the global economy. It’s about stability and the reliability of money. Ask yourself, what’s the dollar worth? Is the euro worth more, really?
Perhaps you have your eyes on the economic data coming out of the States for an indication of where gold and silver are going, but a glance back to 2005 up to 2007 tells you that in the boom years gold rose, so will a real recovery in the States cause gold to fall? To get a more complete perspective on gold and silver subscribe to the Gold Forecaster and the Silver Forecaster, now!
