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.
We are amazed at the reaction of world markets to the Japanese tragedy. How the media can say that the New York Stock Exchange fell because of the Japanese tragedy we do not know. It is a stirring up of unjustifiable fear, in our book.
What is of more relevance is that the Fed has come out and said “no change” whereas the markets had expected an indication that interest rates were close to rising. We do expect to see more falls in the dollar and the Yen because of ongoing increases in liquidity. This will work better in Japan than in the U.S., we feel.
Gold has started to recover at $1,400 and €1,001.93 at London’s opening and the U.S. dollar has fallen to $1.3977 and the Yen holding at Y80.81 for now. The morning Fix in London was at $1,398.50 and €1,002.37 and had moved up to trade at €1.006.56 and in the dollar $1,403.40 before dropping $2 just ahead of New York’s opening.
Gold – Very Short-term
Gold is re-bounding and the dollar is falling again alongside other global markets, including Japan. We expect the gold price to be positive in New York today.
Silver – Very Short-term
After Fixing at $33.88 yesterday, the silver price is now trading at $34.66. The recovery is faster than we thought it would be, so we expect a positive day in New York today, for silver.
Gold Price Drivers
It is amazing to hear the media relating the condition of the unfortunate nuclear plant damaged by the Tsunami to global markets. Personally I don’t know of an investor in the U.S. equity markets, in general, selling his shares because of an explosion in Japan. This is an unfortunate case of fear mongering, which should not go on. However, this is life and as always an opportunity. The Nikkei index is recovering as are other global markets.
With the Bahrain demonstrations being forcibly ended we watch with interest to see if this is really so. It has a direct bearing on oil prices, if worse is to come. As it is events as they are going point to falling oil prices. The next point of focus in global financial markets is the ongoing liquidity injections, which will lower the buying power of the U.S. dollar and the Japanese Yen and maybe other related currencies.
We would like to inform readers of this report that, at the beginning of the year, we forecast that the events of 2011 would be dynamic and structurally damaging on many fronts as the gear-shift down in global uncertainty and instability would happen. We could not have been more correct. We confirm that we did not think we would be quite so right though. We confirm that the year 2011 is a year of consequences and will continue to track these structural changes with regard to the gold, silver and platinum markets on an on-going basis.
[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].
