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.
Gold again was taken higher by Asia ahead of London’s opening $1,338 level. But this time it held up as the dollar sank a quarter of a cent ahead of the Fix, which was set at $1,337.50 and held at $1,336 ahead of New York’s opening. In the dollar this morning’s Fix was $10 higher than yesterday afternoon. In the euro it was set €6 higher.
It is not the euro that is rising today but the dollar that’s falling, which it is doing against the Yen, the Swiss franc and the pound. This is gold positive as usual.
Gold – Very Short-term
The trading range in gold’s consolidation period is narrowing to the mid-$1,335.50 area. We expect it to hold this level with small deviations either way today, in New York.
Silver – Very Short-term
Silver was Fixed in London this morning at $28.32 and is trading lower at $28.27. We do not expect fireworks in New York today, but small movements either way around current prices.
Gold Price Drivers
Today the main driver of the gold price is the falling dollar, although it rose in the euro by €6 on yesterday’s p.m. Fix.
We do not think that the gold price is being affected by the revolutions in Tunisia or Egypt.
We cannot emphasize enough how professional, global institutions will follow a policy of take the offers that are presented ‘on-the-dips’. They will not target quantities nor chase prices. They will take sizeable quantities that are offered to them. Hence they will allow prices to fall as they want aiming at taking offers of stock only. These buyers include central banks where they enter the open market in London.
Sellers or buyers of gold in the U.S. essentially chase prices at the moment. You will note how prices drop at the afternoon Fix persistently. It is this Fix that attracts the developed world’s buyers and sellers, as markets are open on both sides of the Atlantic at that time.
As you have all noted, 2011 is seeing strong signs that food inflation, poverty and poor or corrupt government is precipitating social unrest. The ingredients are there for this to spread to several more countries as pressure build up at ground level. Indeed on several major fronts structural problems across the world are threatening to suppurate and create even more instability and uncertainty.
Currently, we are presenting in the Gold Forecaster, a series called “Financial Earthquake, covering the main crisis areas in the financial world and what they could lead to, as well as the gold forecast for 2011.
[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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