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.
Asia kept gold and silver at their New York closing levels taking the prices to $1,414 with the Fix being set at $1,414.50. The dollar is using up support quickly at $1.3820 in London’s morning. In the euro gold is hardly moving as it stood at €1,021 ahead of the Fix only €1 up on yesterday afternoon. In the euro the Fix was then set almost the same at €1,021.74.
No overnight change in the Middle East [which now includes rioting in Oman]. The whole series of events came out of the blue catching the entire world off guard. With the world in a weakened state and now suffering food and energy inflation, our approach to the global financial climate has been correct. We have emphasized that with such structural weaknesses sudden, ‘out of the blue’ fractures can be huge and catch us all off-guard. We should therefore be pragmatic with investments taking the ‘big’ financial climate into consideration rather than simply hope for the best. We do expect oil prices to come down, but only after these ‘revolutions’ have been settled to their satisfaction. But when will that be? We don’t know, so we shouldn’t invest as though it’s a given, unless you want to gamble as opposed to invest.
Again, because of the weakening dollar, the gold price in the euro fell further to Fix in London, Ahead of New York’s opening the gold price stood at $1,419.
Gold – Very Short-term
The gold price is strong out of London going into New York where we expect to see the same strength.
Silver – Very Short-term
After Fixing at $33.49 yesterday silver is now trading at $34.39 up strongly again. We expect silver to give a strong showing again, in New York today.
Gold Price Drivers
The news that China buying of gold in 2010 has emphasized just how much China’s demand is growing. With last year’s showing of a good monsoon and the continuation of India’s development the record 933 tonnes India bought last year shows just how much pressure on supplies is building up.
However, the gold markets in the developed world seem riveted on their own news events and attribute most moves in the gold and silver price to them. Just as the waves of the sea ride up the beach constantly ebbing and flowing, so it is with the gold price. Successful investors watch the currents and the tides to maximize their profits, but in the East thhey simply look for the dips into which to buy to hold long-term. So one has to balance the weight of demand against supply to see what lies ahead. This minimises the impact of our daily news items.
Bear in mind that the structural changes we are seeing in the gold and silver markets are influencing the impact of traders and speculators on the gold and silver prices. With shorter lived and shallower corrections short-term traders are seeing their influence drop in these markets.
[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].
