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.
Chart courtesy of Kitco.com
Just where to start is the question as the excitement zooms along with a new all time in gold prices partnered by silver prices coming through with a sparkling performance.
First to gold prices where we can see the make up of the move on the chart above, a weaker dollar accounts for $10.10 and buying pressure accounts for $13.20 for a gain of $23.30 with gold closing at $1268.70/oz and silver at $20.48/oz, with big smiles all round.
Chart courtesy of stockcharts
A quick look at the chart for gold prices depicts todays surge and the close with a new all time high, great news for gold bugs across the globe who have kept the their faith in gold and shunned fiat currencies and the stock market in general. However, we can also see that the technical indicators are in the overbought zone, which normally would suggest that a breather was on the cards. On the other side of the equation are the strong fundamentals in favour of gold and silver and the fact that gold has now broken out and is in unchartered waters. It could move a lot higher and move quickly, despite the bears and naysayers, we do expect both metals to put in a decent rally from here to the year end. New Years Eve for those who hold a position in gold and silver will be a bubbly one.
A quick look at todays action in the silver sector shows that silver prices were moving higher in Hong Kong and then sagged a little on the London Stock Exchange before moving higher again in New York. Theres no doubt about it, the NYSE still rules the roost but from here on in we will see the other stock exchanges chipping in with more and more price increases albeit small ones as gold trades around the clock.
Chart courtesy of Kitco.com
The USD has mimicked a dead cat as its bounce from ’80′ to ’83′ has gone into reverse as it is now trading at ‘81.17′ on the US Dollar Index. This doesn’t read as though it is a significant change, but it is now below its 200dma of ‘81.62′ which is a worry for holders of the dollar. The shadow of QE2 looms and billions are being produced out of thin air to stimulate the economy. Giving a drunk another drink is not the answer and never has been. This state of suspended sedation for Joe Public will come to an end with a jolt as spending power diminishes to miserly levels. Attempts to stave of this recession are reminiscent of King Canute trying to hold back the tide. In our heart of hearts we all know that the party was terrific, but now its over and its time to front up and face the problems head on. It wont happen though, governments everywhere will continue to print money thus continuing the debasement of currencies and sending gold and silver to higher and higher levels.
Chart courtesy of stockcharts
Hold firm to your core holdings, physical metal and your options trades, this may be a top, but its only the beginning of a much bigger rally.
Stay on your toes and have a good one.
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