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.
After Tuesday’s excitement, there isn’t much to report regarding Wednesday’s gold trading day. Gold’s New York high of $1,368.20 spot was at 10:20 a.m…which was immediately followed by gold’s new York low [$1,357.20 spot] at precisely 11:30 a.m. Eastern. The gold price recovered from that…and closed virutally unchanged from Tuesday.
Here’s the New York Spot Gold chart on its own, as what happened elsewhere yesterday isn’t worth looking at. The 11:30 a.m. on-the-button low is the standout feature…and I would bet serious coin that it wasn’t random market forces at work here.
The silver price action was slightly more interesting than gold’s on Wednesday. A rally that went vertical just before the Comex open was dealt with in the usual manner by the bullion banks. The silver price held most of those gains for the next couple of hours, but then sucumbed to the same ‘market forces’ that drove the gold price into the dirt at 11:30 a.m. in New York. Every subsequent rally attempt, no matter how tiny, ran into a determined seller…and silver closed down about 17 cents on the day.
Here’s the New York Spot chart for silver…and you can see where every rally attempt got sold off.
The dollar opened around the 78 cent mark…and held in there until 11:00 a.m. in London before gravity took over. Seven hours later, at precisely 1:00 p.m. Eastern, the dollar hit its nadir around 77.53…and closed the New York trading session almost on that low.
There was no sign that the dollar’s activities yesterday had any influence on the gold price at all. If you can see any correlation, please let me know.
The gold stocks opened in positive territory, but didn’t stay there long. And, despite the fact that the gold price recovered after it’s 11:30 p.m. low, the gold shares continued to get sold off…and the HUI closed down 1.75%…just off its low of the day. Most of the silver stocks didn’t do well, either.
Wednesday’s Daily Delivery Report from the CME showed that 50 gold and 87 silver contracts were posted for delivery on Friday. The link to that action is here.
The GLD ETF showed another decline yesterday…this time it was 68,297 troy ounces. And there was no reported changes in SLV.
The U.S. Mint reported selling another 4,000 ounces of gold eagles yesterday, which brings the February total up to 24,000 ounces of gold eagles sold. Silver eagles sit at 897,000 for the month so far.
There was a fair amount of in/out activity at the Comex-approved depositories on Tuesday. They reported receiving 797,177 ounces of silver…and shipping out 621,340 ounces…for a net change of up 177,837 troy ounces. The link is here.
Before getting into my stories for today, here’s a graph that was sent to me by Washington state reader S.A. It shows the S&P price action plotted against QE1 and QE2. It should be no shock to anyone that the equity markets are doing well, as Bernanke has made no secret of the fact that he wants the equity markets higher…and it’s obvious that the primary dealers are doing his bidding.
