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 amounts coming out of the SPDR gold ETF in the States is falling at the moment. Yesterday saw around 1.2 tonnes of gold sold from that fund. However, don’t think that this is why the gold price dropped in the dollar. In the euro just ahead of the morning Fix the euro gold price has moved through €1,000 to €1,005.29. This is a €10 move in the gold price. The morning Fix clarified the daily demand & supply scene by Fixing at $1,359.00 and €1,004.73. Just ahead of New York’s opening the dollar gold price began to move higher at $1,362.70 in the middle.
For the chart Technicians this presents a slightly confusing picture, but we suggest that if you follow the line of the head of the World Bank, you see the currencies moving against gold. Quite an adjustment, but one we are highlighting in our work in the Gold Forecaster now.
Gold – Very Short-term
Gold still has room to fall without affecting the consolidation process, as it is sitting at the top of its trading range. We expect a quiet day today in New York, but id SPDR gold shares sales continue it will have a downward impact on the gold price. If that does not happen, we expect the gold price to continue to attack overhead resistance with an upward bias in New York today.
Silver – Very Short-term
Silver Fixed at $30.00 this morning and is trading at $30.13 ahead of New York’s opening. We expect little movement today, but if there is, it is likely to be on the upside in New York today.
Gold Price Drivers
An influence that is trying to push gold prices down is the continued selling of gold from the SPDR gold Exchange Traded Fund. Yesterday, the sales were low at 1.2 tonnes after a string of sales that were in excess of 100 tonnes in total over the last few weeks. What is clear now is that such sales will have to be quite a bit higher than 1 tonne a day to successfully lower the price of gold. Asian demand is taking this off the market quite easily now. If the SPDR gold ETF sales were not there where would Asia get the gold it wants from?
The tightness of supply we are seeing at the moment is also not feeding through to the gold price. The buyers at the moment are long-term buyers building up positions and waiting to be offered gold by the dealers. Perhaps they are standing back at the moment because offers are not there and they will not chase prices. Buyers for Asia are being forced to stock up all the time or so will buy irrespective of the price. The price play appears to be between these to demand factors. Supply remains price insensitive and inelastic.
Currently, we are presenting in the Gold Forecaster, a series called “Financial Earthquakes”, covering the main crisis areas in the financial world and what they could lead to.
[Apart from covering the gold and silver markets Gold Forecaster and Silver Forecaster are structured in a way that gives perspective to macro-economic factors, from oil to currencies, covering the pertinent global gold and silver market influences that directly affect the gold and silver prices. It is 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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