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.
This week’s gold trade traded a very choppy and volatile $51.90 range. We traded as low as $1309.10 on January 31st and as high as $1361.00 today February 4th. It appears that traders and investors alike are choosing to choose the precious metals as a “safe haven“ investment due to the chaos in Egypt. The political tensions have resulted in rioting and violence as protesters have demanded a change in the Egyptian government. It has been reported that Egypt’s military has been sent to protect the SuMed pipeline against possible attack due to the civil unrest. The SuMed stretches over 200 miles and transports crude along the Suez Canal. Obviously if the pipeline is disrupted it could send the price of Crude oil sky rocketing and higher Crude prices will be “Bullish” for precious metals. The Egyptian scenario is far from a resolution and will continue to shape the markets. The Labor Department reported that unemployment rate fell to 9% in January. This was pleasantly unexpected.
WEEKLY EVENTS…
European central bank Boss Jean-Claude Trichet stated that “very close monitoring” of inflation warranted in the Euro region. This statement may have chased savvier European investors into the precious metals as a “safe haven“ investment.
The weekly Initial Jobless Claims was 415,000.
This was expected to be 420,000.
CONCLUSION Early in the week it certainly looked as though the Gold market Would sell-off below the psychological $1300.00 an ounce level due to many central banks decisions to raise key interest rates to combat their countries historically high inflation…These countries included China, India, North Korea, and Thailand…. However, due to the crisis in Egypt global investors have once again turned to Gold and Silver as their alternative investment of choice. The resiliency of the precious metals continues to shine… As traders of the precious metals you will need to monitor the situation in Egypt and see if indeed Egyptian President Hosni Mubarak does step down. The bigger question: Who replaces him?
MY SWING NUMBERS FOR 2/7
APRIL GOLD
RESISTANCE # 2………………….$1367.00
RESISTANCE # 1………………….$1359.00
PIVOT……………………………… $1352.00
SUPPORT # 1……………………..$1343.00
SUPPORT # 2……………………..$1337.00
VOLUME…………………………….127,000
MARCH SILVER
RESISTANCE # 2……………………$29.58
RESISTANCE # 1……………………$29.32
PIVOT………………………………….$29.02
SUPPORT # 1……………………….$28.76
SUPPORT # 2……………………….$28.46
Mike Daly / Gold Specialist
PFG BEST
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312-563-8029
There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
