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.
Overnight Asia lifted the gold price even more to $1,438. After London opened and the Fix was set at $1,434.50 and €1,011.24. Then gold dropped lower to traded lower at $1,431.30 and €1,010.13.
We were not able to post this report timeously, yesterday so will include the content in today’s report we feel is pertinent to today. The main feature of the day was the rising oil price at $118 for Brent Crude and $108 for West Texas. It continues to creep higher. With little change in the Middle East over the weekend to the political situation there, the rising oil price appears to be due to either more speculation that the price is set to rise or genuine demand for oil rising globally.
What is worrying is the food and energy inflation is high and rising higher in a world where the ripple flows through societies at the poorer levels and on into the political arena. Few gold investors are expecting resolutions to the troubles of the world and remain solid in their determination to keep investing in the precious metals.
Gold – Very Short-term
The gold price is looking positive and will either hold or rise today in New York.
Silver – Very Short-term
Silver is broaching recent record highs and may well move to higher levels today in New York.
Silver & Gold Price Drivers
The subject of interest rates has moved forcefully onto gold investor’s screens. The idea that rising interest rates in the main economic blocs of the Eurozone and the United States will force gold lower is a popular concept that may well be put to the test soon. With the Eurozone scheduled to raise Eurozone rates up to three times this year investors have to ask the question, will that bring credibility to the value of the euro? Will this be sufficient to bring investors out of gold into the euro? Life is not so simple unfortunately. We do not have the space to discuss this in full here but will be looking at this in the next issue of the gold Forecaster and the Silver Forecaster.
We have never known a time in our lifetime when the future was more uncertain and possible global crises threatening to disrupt what calm there is in the decaying developed financial and political world.
– While Fed Chairman Mr. Ben Bernanke tells us that inflation is not a problem, we are of the opinion that neither food prices nor energy prices will pull back but will continue to creep higher in the longer-term. While this may be true the main problem is that this time round it is going to suppress growth against a background of falling confidence. This is now leading to ‘stagflation’ right now in some countries. It will breed more serious problems of a more serious nature in the developed world.
– The U.S. is currently playing political brinkmanship with governments financing, indicating that prudent financial management is not the top priority there, but political maneuvering is. This hardly inspires confidence. Once the U.S. debt situation from the Federal government down to that of individual states suppurates the whole question of ongoing foreign support for the States will be subject to review. Certainly U.S. politicians are looking somewhat irresponsible to foreigners in the way they are handling government finances.
– The Eurozone crisis seems to decay day by day, particularly now that interest rate rises will be imposed on already distressed economies there.
We have barely touched on what lies ahead out of sight ready to undermine systems in the developed world. All of these are gold positive. There is so little out there that is gold negative!
[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].
