Metals only winners in market chaos
Chaos. Confusion. And a lot of people losing a lot of money. This is how I would prefer to describe the markets for the past week.
Chaos. Confusion. And a lot of people losing a lot of money. This is how I would prefer to describe the markets for the past week.
Gold reached another peak in Saturday trading in India, the world's largest consumer of the precious metal, and is now within reach of the psychologically important level of 30,000 rupees. Bullion hit an all time record on Friday in New York and is already up more than 30% in 2011, after a decade of annual gains. India's imports could hit a record high of 1,000 tons this year the president of the Bombay Bullion Association told reporters at a major gold conference in Kovalam in south India, but others struck a more cautious note with Scotia Mocatta, a leading Asian precious metal trader, saying imports could fall 20% as higher prices scare of retail buyers. Consumption in India last year drove Indian bullion imports to the highest ever at 958 tons, according to the World Gold Council.
Dow Jones reported that state run Steel Authority of India has raised INR 4 billion (USD 87.5 million) through a bond sale, three people familiar with the matter said. The steelmaker raised the amount via 10 year bonds offering a yield of 9.30%.
Anglo American is exploring a bid for Macarthur Coal that would challenge Peabody Energy Corp.’s $4.9 billion offer for the Australian miner, said two people with knowledge of the matter. Anglo American, part owner of the world’s biggest platinum and diamond producers, is studying Macarthur’s finances, said one of the people, who declined to be identified as the talks are private. Buying Brisbane-based Macarthur would give Anglo steelmaking-coal mines in Australia as prices trade near a record. Peabody and its bidding partner, ArcelorMittal, took their offer directly to Macarthur shareholders after talks with the board collapsed.
In a surprise announcement Papua New Guinea on Friday introduced a plan to hand state ownership of mineral and energy resources to landowners, a move that may prove disastrous to foreign miners developing massive projects and pushing into new regions of the resource-rich country. The announcement by PNG's new leader comes ahead of elections in 2012 that many observers have warned is bound to lead to civil unrest. The move may also derail PNG's economy which is booming with growth this year expected to reach 11%. The mining industry employs roughly 30,000 people and supplies 80% of export earnings.
Gold has enjoyed an amazing rally in recent weeks, catapulted higher by the extreme fear sparked by the sharp stock-market correction. Naturally such big and fast gains have led to a surge in gold’s popularity among investors and speculators, as everyone loves a winner. But gold prices flow and ebb like everything else, and this metal has become very overbought today.
Whenever gold and silver hit a correction, those are the times that try men’s souls. But they are also a classic case of making volatility our friend.
Vancouver BC is undoubtedly one of the greatest mining centers in the world and British Columbia should be a mining powerhouse.
Kommersant cited unidentified people close to the matter as saying that Mr Viktor Vekselberg Russian billionaire Renova Group is in talks to buy metals assets of Viktor Pinchuk EastOne LLC.
Gold (NYSE:GLD) has been in an uptrend for over a decade now. Last week, gold climbed above $1800 per ounce before consolidating.