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 and Silver’s Daily Review: 
After the awful tragedy in Japan placed doubts on Japan’s financial future some media reports said the gold rose on the back of that. We could not disagree more.
In the euro London opened up at close to closing levels on Friday in the euro. As the dollar continued to weaken the gold price appeared to rise to $1,424 up from $1,417 on Friday, but this was entirely due to a weaker U.S. dollar. As London’s morning moved into action the gold price in the dollar continued to rise to $1,427 ahead of the Fix, but then slid back to $1,424.70 as the dollar slipped against the euro to $1.39385 down two cents against the euro and slipped against other currencies.
Gold Fixed in London at $1,424.50 and €1,019.83 well up in the dollar and down in the euro. The consolidation process continues. Thereafter it moved up quickly to $1,428.40 and €1,022.86 ahead of the open in New York.
Gold – Very Short-term
Gold is affected by the continuing fall in the dollar but in both the euro and the dollar we expect a positive day in New York today.
Silver – Very Short-term
After Fixing at $34.10, the silver price is now trading at $36.14 and should remain positive in New York today.
Gold Price Drivers
Tragically, we will witness the benefit of QE in Japan to prevent the sudden deflationary influences of the Tsunami and earthquake. Hopefully, it will allow the Japanese economy to continue moving forward with the minimum of economic disruption after Friday’s events. After the initial downward pressures on the economy, the reconstruction work will add a large positive influence on the Japanese economy. However, we do not see these events affecting the gold or silver prices.
Of far greater relevance is the discord between Germany and Ireland. Ireland will continue to refuse to elevate its Corporation Tax because that they see as the only way to garner enough revenue to repay its debts, but Germany wants more.
The problem with Greece appears to have softened E.U. leaders made a provisional agreement to lower Greece’s interest rates of about 5% for aid by 1%. They also extended the repayment period of the loans to 7 1/2 years from three years. We wait to see if the market believes that this will deter a default by Greece in the future.
The net effect is that the Eurozone crisis remains alive until the markets are convinced that no Sovereign State member of the E.U. is in danger of default. We wait for the E.U. to be really united and verbally so before the euro is out of danger. Once it is expect to see the dollar tumble, because of its structural faults. So while the E.U. and U.S. continue with their problems, their exchange rates are likely to give the appearance of stability. The true picture is being painted by a rising gold and silver price.
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