The power of the internet: The best read story on Mineweb.com on Thursday with well over 2,000 page views was one I wrote titled Gold to fall to $1,100 then skyrocket - silver, platinum in behind. With the gold price having been knocked back to the $1,150s with the potential for moving down further, one might say the article was perhaps timely – but if one looks at the date of the article it was written on May 26th last year. I suppose it could be seen perhaps as relevant today as it was nearly 10 months ago – it’s possibly just that the timing was out. In the article I was reporting on a piece of Elliott Wave analysis which was then suggesting that a gold price fall to around $1,100 would probably take place over the following 3-4 months and that the bullion price would have begun its huge upwards surge by the end of 2014!
However as recently pointed out by GATA’s Chris Powell, perhaps such technical analysis has lost its value and relevance in these days where he sees the market as being manipulated by those who have a vested interest in controlling the prices of precious metals – notably central bankers, governments and their mega bank allies. The analysts who came up with the research, and its conclusions, might say that any manipulation there may be is only delaying the inevitable, but the big question is how long can this ‘inevitable move’ in the price pattern be pushed into the future. By the time we know it may well be too late to take advantage.
But, despite perhaps my best read article of the week on Mineweb being so dated, there have been others which I would commend readers of Lawrieongold to view if they haven’t already. On Monday Mineweb published Knives are out for gold and silver - again which was looking at how quickly some bank analysts are keen to downgrade their price forecasts at the slightest blip in price. To be fair any sustained increase in price will also see forecasts raised but it does rather devalue the predictive assessments of these analysts who have to try to ensure they don’t get the call wrong, thereby being reactive to price moves rather than having a genuine long term view. One may quibble with an analyst like Jeffrey Currie at Goldman Sachs over his $1,050 gold price forecast, but at least he has been consistent in his views and doesn’t change them every time the price deviates upwards or downwards.
On Tuesday I published an article titled All is not well on the metals commodities front which was looking at the general price malaise afflicting metals commodities virtually across the board and on Wednesday World top 10 gold miners face negative free cash flows which pointed out that in Q4 2014 the world’s biggest gold miners combined had moved from producing free cash flow to negative cash flow. Thursday saw the publication of a report on a London presentation by Willem Middelkoop: Very positive on gold but silver the big favourite – Middelkoop. Willem runs a Dutch precious metals fund which primarily invests in pre-development gold juniors and is very much in the gold bull camp.
Finally today an article entitled Not another groundhog year for metals – Wrathall set out the Head of Investec’s Global Natural Resources team’s rather gloomy analysis of the mining sector looking ahead. Indeed the only really positive sector of the industry he could see over the next couple of years was diamonds. He reckoned that to an extent recovery in most mined commodities sectors was being adversely affected by the strong dollar and low energy prices which have enabled many operations, which might have shut down otherwise to stay open and thus not help alleviate the global oversupply situation which now seems to prevailing.
If you haven’t read these, do follow the links perhaps and do so now. They do give an insight into current thinking on what is going on throughout the mined commodities sector which has been having a pretty hard time right across the board.