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.
The gold price closed in New York at the $1,552 but fell in Asia back to $1,547, before fixing at $1,546.00 and in the euro at €1,074.36. It then picked up to $1,550 while the dollar hovered around $1.4305 to $1.4350 and in the euro gold recovered to €1,080.18. Overall the markets were unmoved by the vote of confidence in the Greek government.
Ahead of New York’s opening gold was trading at $1,523.35 down $21 and moving in line with the euro’s fall. In the euro, gold stood at €1,075.43 up €2 on yesterday. The euro was going weaker at €1: $1.4165.
Silver is still under the influence of the London silver fixing, which was set at $36.01 barely changed on yesterday but fell to $35.92 ahead of New York.
Gold – Very Short-term
Dollar gold is likely to be steady to stronger today in New York.
Silver – Very Short-term
Dollar & euro silver price should be steady to higher in New York today.
Silver & Gold Price Drivers
The see-saw has just tipped to the side of harsh reality. With €300 billion owed the Greeks can never fully repay that debt, even if they moved out of recession and had a fantastic decade-long boom. So what can the creditors do? In 2013 they know Greece can make an orderly default with the public sector of the E.U. carrying the burden. So the E.U. must adjust the debt burden through voluntary extension of the debt and perhaps voluntary lowering of capital repayments. This will allow the banking system to manage the debt so that it does not look like a default, when in fact it is [‘a rose by any other name smells as sweet’]. The issue is now about the survival on the banks and the E.U. and the level of the euro internationally.
The Greek opposition will not support the austerity measures. So now that tiny majority of Greek MP’s will be nurtured very carefully. But this time it is not a test of loyalty, but a test of voter support. Will they get it? So the risk of default in the near-term remains hanging over the market. This is gold and silver positive! The certainty of default in 2013 is there not just for Greece, but for the rest of the debt-distressed E.U. members.
With the Congressional Budget Office in the States sending out alarming, U.S. debt signals, the state of U.S. debt is now firmly on investor’s screens. This lessens confidence in the dollar and brings the probability of a U.S. debt crisis into view in the next two years, as well. Combined, the U.S. and E.U. debt crises are visibly undermining confidence in their respective currencies. The stronger gold price is beginning to illustrate this as well as to confirm the correctness of investor’s positions in gold and silver.
How can such embattled currencies stand as adequate measures of values? Debt default or not, the damage has been done.
With the see-saw tipping back to harsh realities, we are watching a fundamental positive factor being added to gold and silver’s fundamental support, just as an individual’s loss of creditworthiness undermines his financial credibility, only this time it’s the world’s major powers.
[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.]
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