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 prices could fall below $1,550, returning to record highs by the end of this year, Thomson Reuters GFMS, a top precious metals consultancy, said this morning.
Together with its outlook for the precious metal, the consultancy published its Gold Survey 2012, the 46th edition of the report, at events held in London, Johannesburg and Toronto.
Philip Klapwijk, global head of metals analytics at Thomson Reuters GFMS said the market would easily see last September’s record high [a closing high of $1,900.23 on September 5] being taken out.
“A push on towards $2,000 is definitely on the cards before the year is out, although a clear breach of that mark is arguably a more likely event for the first half of next year,” said Klapwijk.
He added that GFMS expects any softening in the price to prove temporary as “acute” fears over Eurozone sovereign debt, focused on Spain, the region’s fourth largest economy.
Some key areas of demand, such as acquisition from central banks, will remain in place, but the company said it does not expect official sector purchases. Last year, those rose to their highest since the mid 1960s, to increase higher this year in ounce terms.
The company painted a weaker picture in terms of jewellery buying, the main source of gold demand. Gold jewellery manufacturing fell 2% in 2011 to 1,973 metric tonnes (2,175 tons), GFMS data showed, as offtake from major consumer India fell nearly 3% to 761 tonnes.
Yet, Thomson Reuters GFMS believes the prospects for gold prices this year remain bright.
“Investors continue to be concerned about the outlook for inflation, with governments in general showing little appetite to tighten monetary policy significantly,” said Klapwijk.
“Furthermore, growing price acceptance by consumers will help lift jewellery demand, while generating only a muted response from scrap. Together, these will help raise the support level in the gold market and provide a firm platform for investors to take gold higher,” he explained.
Gold was trading at around $1,660 an ounce in London on Wednesday morning.
Comments
Equidata1
The world’s most precious metals, Gold Silver, Platinum and Palladium are produced in South Africa, Canada and Russia. Together they control 93% of the world’s platinum, 90% of the world’s palladium and 75% of the world’s gold.
They also control 72% of the world’s Vanadium reserves, 92% of the world’s Manganese and 85% of the world’s Chromium. All of the last three metals are vital to the U.S. defense industry and it would be in the best interest of Russia to cut off supplies of these metals to the United States.
Supply disruption from any of these sources could start as a result of the following:
1. Retaliation against the United States for placing stringent embargos on South African, Canadian and Russian products.
2. Mine closings due to strikes and terrorism.
3. Victory by Russia, Iran and other nations over Nuclear Arms treaties thereby unwittingly blackmailing the U.S. by threatening to cut off supplies of their natural resources to America and their Allies.
There are two reasons why gold should be the foundation of any portfolio. One is the limited downside risk and two is the great upside potential.
Owning gold in these uncertain times will put you far ahead of the crowd in the years to come. Owning gold is critical to financial security; it is the ultimate form of financial security because it is cash. Not cash in the form of paper, but cash in the form of money and a prudent investor traditionally goes into cash in times of uncertainty. Gold is money in the form of cold hard cash and is held for safety, is liquid, mobile and retains its value in normal times. A cache of gold, hidden, will ensure that whatever happens, you will at least retain that amount of value.
The present outstanding billions of dollars held worldwide in relationship to the ounces of gold in the treasury, pegs the price of gold at about $ 3300 dollars per ounce if dollars were to be redeemed. In 1957, the U.S. had 650 million ounces of gold in the treasury and only $ 200 billion dollars outstanding and the writer sees no plausible reason given today’s deficit woes, why this trend will reverse itself.
Gold has made a comeback recently and we think we may again see it selling above $ 2800 dollars per ounce in the near future.
To get a copy of our White Paper “Gold selling for $3300.00 an ounce and you can’t legally own any”, Email us at [email protected]. Cost is only $ 20.00 a copy and you will learn how to cash in on the Great Gold Rush of 2013 without actually owning the metal.
Everything you will need to know to successfully Trade Gold Stocks is outlined in GENESIS, our Seminar titled:
“Principles of Technical Analysis and Chart Reading in Trading Stocks”.
Now available at AMAZON.COM.
ISBN # 09622444-1-4
From Wallstreet Wise:
Visit us at: http://wp.me/p1Ohnx-3d