Gold gets a lot of press as something everybody should have a bit of. The recent history of the gold price looks pretty good when graphed in US$ but, under closer examination, we see that gold is losing value when quoted in other currencies, including the C$.
There has been much wringing of hands and gnashing of teeth recently about the falloff of gold demand from India. India is traditionally a big importer of gold during the wedding season, where families add to their hoards of the yellow metal, as a hedge against bad times. With the rupee strengthening against the US$, gold as an inflation hedge has lost some of its lustre in the sub-continent.
The following article very nicely lays out the current state of the gold market, when viewed in non-US$ terms. Investors take heed! One should not overlook the critical importance of gold’s valuation in other currencies when judging its investment potential:
(From the “Globe Investor” website – John Heinzl – Apr. 30, 2009)
“Now that gold is pushing $1,000 an ounce, is it time to load up on the precious metal?
Gold bugs always seem convinced of two things: The financial world is on the brink of collapse, and the price of gold is about to shoot to $2,000 (U.S.) or $3,000 an ounce.
Now that gold is rising again, is it time to load up on the precious metal? And if you decide to buy gold, how much exposure should you have?
Before you stock your basement with gold bars and ammunition, let’s provide some context by looking at how gold has performed over various periods.”
Our next article is a few months old but still holds true. It gives an excellent description of the difficulties facing copper project developers in today’s pricing environment: These new projects need higher copper prices!
Without improving copper prices, old mines cannot extract ore cost-effectively and new mines cannot afford to open; hence, the anticipated squeeze on copper supply. There is nothing like reinforcing an important point!:
(From the “IKN – Inca Kola News” blogspot – Otto Rock – Dec. 12, 2008)
Candente (DNT.to) offers the world of copper a dose of reality
A very interesting press release from Candente Resources (DNT.to) today, the junior exploration-stage copper play run by Joey Freeze (i.e. class mgmt act) and owners of the Cañariaco greenfield in Peru…
“The bottom line is that DNT.to, a pretty good set up as junior coppers go, has just presented a cold fact to the market; there will be no copper projects coming online until the metal gets back above $2 minimum. Not Cañariaco, not anywhere. That’s because the DNT.to project is a very good benchmark in world-style numbers (relatively cheap, relatively big, relatively well-run, relatively well-designed etc). We have a very good reference point going forward. Until copper moves back above $2, the market will not get any new supply…”
To reinforce the point raised in the above article, here is an in-depth look at the technical and fundamental forces affecting the copper market:
(From: “The Zeal Speculation and Investment” website – Scott Wright – April 10, 2009)
“Most analysts believe this deep global recession has abruptly ended the powerful secular commodities bull that was born at the turn of the 21st century. And it is certainly hard to argue this point considering the dismal panic-selling-induced performance of nearly all commodities.
The volatility and fear that took hold of the markets have given traders the mindset that all economic activity has ground to a screeching halt. And the markets have discounted the idea that global economic growth is over, thus warranting the aggressive selling of all assets.
Now these are indeed extraordinary times that most traders have never experienced in their lifetimes. And we’ve seen plenty of parallels to the Great Depression that a growing contingent of fearmongers continues to proselytize. But is the sky really falling as hard and fast as people think?”
For the full article, please go to: www.zealllc.com
admin General Copper
