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 market did move down during New York’s day, but not by that much. Then overnight it turned round to take us back towards $1,250. The morning Fix at $1,242.50 was followed by a steady rise right through to New York’s opening. Again four of the five bullion banks were buyers at this morning’s gold Fixing.
Silver is looking a lot healthier at $18.80.”
Gold – Very Short-term
Gold has hormones today! It looks like New York will see more strength after the lead set by London today. The mood of the gold market is good, with yesterday’s long-term gold investors picking up a few more tonnes into gold Exchange Traded Funds. We expect central bank and other large buyers to lift their limits shortly if they are to buy their quotas of gold for national reserves.
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Silver – Very Short-term
Silver also looks like it will rise with gold. Presently, it is sitting just below $18.82. It does need to taste long-term investment into the Silver Trust first, though.
We will be addressing the issue of “Is Silver de-coupling from gold” shortly, in the Silver Forecaster newsletter.
Gold Price Drivers
Having forecast global financial conditions for so long now we were amazed to hear and see media comments ahead of the G-8 and G-20 meetings this weekend. To a man they expected disappointment. While these meetings have been convenient places for world leaders to meet in private, they have not been the place where reformation and cooperation have made their mark. But this time solid, convincing action is needed. Should these two meetings repeat the past then they will simply provide a testament to the inadequacy of the political system to grapple with the real problems facing the developed world? This places another recession squarely on the table. Deflation also threatens. Mr. Geithner is right to press for longer term stimuli. He well knows that if this doesn’t happen, the next bout of recession will have to be met with inflationary issuing of new money in quantities that extend far beyond the quantitative easing we have seen to date. The division between the U.S. approach to financial regulation and growth and Europe’s approach is deeply disturbing, but very gold-positive. What seems to be being missing in this monetary world is the need to build growth from grassroots up, not the top down.
At grassroots levels across the whole world it is time for governments to see what they can do for you.
We don’t believe we are moving to a collapse situation of the U.S. $ or the €, but we do believe that we will continue to see markets fearful, uncertain mercurial and volatile. This is no longer a short-term situation it will stay for the long-term. It is this environment that favors gold currently.
Regards,
Julian D.W. Phillips
