Central Bank Credit Crisis May Be Positive for Gold and Copper

Source: Mineweb.com (12/18/07)

Metals analysts John H. Hill, Graham Wark and Paul Cheng said that "recent Fed action, and co-ordinated central bank intervention to thaw credit markets, could be positive for mining and metals if it staves off debt-driven deflation/recession, or spurs the next leg of the re-flation trade.

Citigroup recently suggested that the "defining features of 2008 may well be reduced volatility in metals prices, and key equities finally moving closer to full market multiples."

Metals analysts John H. Hill, Graham Wark and Paul Cheng said that "recent Fed action, and co-ordinated central bank intervention to thaw credit markets, could be positive for mining and metals if it staves off debt-driven deflation/recession, or spurs the next leg of the re-flation trade. In many ways, this makes M/Metals a test case for global growth re-balancing."
,br>"Our sense is that the ‘non-surprise' of 2008 will be that the U.S. slips into recession, and that the ‘surprise' will be that M/Metals prices remain robust, as suggested by the 5-year futures on copper and aluminum," they advised...

Citigroup observed that "gold is oscillating around $800/oz as speculators have locked in profits. We view the outlook favorable for a test of $1,000."

The analysts said they see precious metals "as well-positioned given the inherently re-flationary implication of Fed and Central Bank action. We would expect strong safe-haven demand in the event of U.S. recession." However, the analysts also noted that gold equities have been underperforming bullion in the fourth quarter "as investment demand has slackened.

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Source: Streetwise Reports (07/13/2020)

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"China's export quota could be opportunity for Canadian miners"

Mexico: Gold's Next Powerhouse Player
Source: Marc Davis, BNW News (11/03/2009)

As the world's key gold producing nations struggle mostly in vain to replenish dwindling below-ground supplies, Mexico is bucking the trend in a big way.

Where Have All the Gold Mines Gone?
Source: Brent Cook, Exploration Insights (04/14/2009)

Given the declining global gold production, mining companies’ demand for reserve replacement and the acute dearth of new gold discoveries, there is no doubt that real economic discoveries will be exceptionally valuable. . .the opportunity for stellar profits is the best it has probably ever been. Identifying the few successes, however, will require vigilant and constant technical assessment of geology and drill results, always with an eye to mine economics.

Congo Completes Mining Review, Says Majors Quit Talks
Source: Reuters (12/20/2008)

"Review process is extended an additional 45 days to allow six companies to return to the negotiating table for direct talks with government ministers."