The Real Story in the Metals Markets |
| The gold price reached an all time high of $1,380 in mid-October.
Investors continue to buy gold in the face of uncertainty with regard to
the outlook for the U.S. dollar. The decade-long rise to that record gold price has seen the price several times pull back and consolidate after a big move. It is not clear if that pattern will repeat. If it does, it would create a buying opportunity. The expectation of inflation arising from the on-going stimulus in Western economies has also contributed to growing investor interest across a range of commodities. Copper is close to its all-time record high. Tin has passed its previous high-water mark. Other metals have also moved higher. While there is some element of speculative interest in the metals markets, the main driving force is clearly due to the strong fundamental growth in demand from the developing world. Metal consumption is growing in the face of constrained supplies. The real story in the metals markets is not so much the price moves as the need for new sources of supply. Aside from the gains in demand, the mining industry has a constant need to replace depleted mines. The small companies that have metal deposits hold the promise of big returns for shareholders as they advance those deposits toward production. Some of the gold juniors are getting recognition for the values of their gold deposits. The base metal companies are still, in general, not getting anywhere near the credit they merit for their deposits. |
2nd Year HALF Price!
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