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 around $1,452 in New York yesterday and held that level in Asia until closing time there. Then, just before London opened it jumped to $1,462. During London’s morning in line with the dollar it pulled back slightly to Fix at $1,457.50 and in the euro at €1,007.81. For the rest of London’s day ahead of New York’s opening it remained lackluster at $1,455.
The dollar turned stronger in London and moved back to $1.4393 which brought the euro price of gold in at €1,010.91 up €4. So again gold’s movements in the dollar are about the dollar not about gold.
In silver, prices were well behaved with silver Fixing at $40.67 and holding $40.65 afterwards. In the euro we saw a Fix at €28.26 which showed its fundamental strength clearly.
The mood of the market in silver is “holding strongly and waiting to move”. In gold it is, “holding steady in the euro, nearly ready to move.”
After the Fix, but ahead of New York’s opening gold was seen holding the $1,456.35 level. Meanwhile, Silver was holding at $40.73 and starting to move higher. The dollar stood at $1.4403.
Gold – Very Short-term
The same as yesterday, the gold price has almost completed its re-grouping, so we expect a day of consolidation with a positive bias in New York today.
Silver – Very Short-term
Again, the same as yesterday, the silver price is holding steady and looking robust. We expect prices to continue to hold steady but show a positive bias, in New York today.
Silver & Gold Price Drivers
U.S. citizens as well as foreigners must be shocked to read Congress’ report on the banking industry and the fact that the Federal Reserve said it’s taken enforcement action against 10 banks over “a pattern of misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing. These deficiencies represent significant and pervasive compliance failures and unsafe and unsound practices at these institutions.” The banks are Bank of America, Citigroup, Ally Financial, the HSBC North America unit of HSBC Holdings, J.P. Morgan Chase, MetLife, PNC Financial Services, SunTrust Banks, U.S. Bancorp and Wells Fargo.
While analysts talk of real interest rates being able to cause gold to fall, we feel that they are ignoring the decay in trust for the U.S. financial and monetary system. Foreigners for sure are taken aback at the thought that they would sell their gold and silver because U.S. interest rates are going to give them, at last, a small income. Compare that to the almost 500% total return on gold over the last decade and ask yourself, in the light of the damming Congressional report on banking practices and the above action, “would you really expect foreigners [who now make up the bulk of gold and silver investors] to sell their gold and silver and invest in U.S. bank deposits?” Be careful of what you read!
In the latest issues of the Gold Forecaster and the Silver Forecaster we look at whether gold and silver prices are really rising?
[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].
