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Metals / Gold

  • Can Gold Come Back From The Brink?

    After tripling in value between 2000 and 2011, commodity prices continue to crumble. Commodity indices have lost about a quarter of their value, a decline that quickened over the summer, when gold, oil, coal, corn, soy, and grain all hit multi-year lows. Much of the slide can be attributed to the slowing global economy. Most notably, decelerating growth in China has slashed demand for all types of commodities. Also, enormous capacity that was planned during the boom years has come online, increasing global supplies. The combined effect has brought about the end of the commodity “supercycle,” according to several major…

  • These Miners Are Seeking Over $1.3 Billion in Acquisitions

    There's been a lot of press lately about a possible slowdown in the economy of China. And speculation over the effects that such a happening might have on the commodities sector.But two separate news items last week suggest Chinese mining companies are still cash-rich. And on the hunt for acquisitions.In the gold space, for example. Where China's largest gold miner, Zijin Mining, said it is looking to buy up to $1.3 billion worth of assets this year alone.Zijin officials told Bloomberg that the firm is primarily targeting gold projects in Africa. Noting that they are looking for projects with more…

  • Foreign Mining Companies Flee China

    In the 1990s, China opened up the country’s vast mineral resources to international investment.Over the past decade, it has reformulated its mining legislation to attract foreign companies into the Chinese mining sector with the hope of speeding up its modernization.Between 2001 and 2004 the number of foreign mining projects quickly increased from 150 to 279.But by 2010, this number had declined to 92. International firms continue to feel stymied by an inconsistent and convoluted mining policy and their inability to create relationships of trust with local mining stakeholders.Foreign investors’ hopes of being successful in the Chinese land of opportunity have…

  • The Highs and Lows of Gold Prices Following QE3

    Following the announcement of the US Federal Bank's intention to begin a third round of quantitative easing in mid-September, the global price of gold skyrocketed. With prices already beginning to fall back down to earth, it seems now that earlier confidence in this trend as a long-term phenomenon might have been misplaced. Despite its status as a favourite and reliable commodity, surprisingly slippery factors determine gold's value.On September 13th 2012, the United States Federal Reserve announced its intention to initiate a new round of quantitative easing, or QE. Easing refers to a process whereby an institution like the Reserve seeks…

  • Ready to Take Some Pain?

    Look at the chart below and it is clear that Ben Bernanke's announcement of QE3 triggered a classic "Buy the rumor, sell the news" type reaction in the market. The market rose for literally a few hours after the epoch-making announcement. After that, it has been all slow grind and chop sideways.Are we setting up for a major market selloff? I don't think so, not until 2013 anyway. The Fed's aggressive monetary move was largely discounted by the market in the four-month rise into the announcement. Rather than provide the rocket fuel to soar higher, the action has raised the…

  • Gold is Breaking out to the Upside

    Look at the $25 move in gold today, and it's clear that an upside breakout is imminent. It made this move on a whisper of a rumour about a speculation that China may take out an eyedropper and tickle their economy with a few more drops of stimulus.This is proof positive of how sensitive the barbarous relic is to global QE/stimulus. Given that we can expect a steady dose of this medication from central bankers for years to come, the outlook for gold today is probably better than for any other single asset class. Gold charts are breaking out all…

  • Buy the Big Dip in Gold

    Look at the charts for the barbarous relic below and you can only come to one possible conclusion. If the Federal Reserve disappoints on Thursday, just a little bit, even by a smidgeon, and does not deliver QE3 and gold sells off big, you should jump in and by the stuff like crazy.All of the charts for gold and the derivative plays are showing major breakouts to the upside. This is true for spot gold and the ETF (GLD), which broke a major downtrend line last week. It is the case for the gold miners ETF (GDX). It is also…

  • Time to Pick Up Some Gold

    Gold has clearly evolved into a call option on global quantitative easing. Don't think of it just as the stuff your dentist puts in your teeth or the thing your girlfriends gets you to wrap around her finger anymore. I don't think that the Federal Reserve will implement QE3 at its September 16-17 meeting, or even next year. This shocking realization will be bad for gold prices.However, Europe is a completely different kettle of fish. Having just spent two months there, I can tell you with great certainty that the economic conditions are far more extreme than any economic data…

  • Is Gold is Making a Comeback?

    One of my best calls of the year was to plead with readers to avoid gold like the plague, periodically dipping in on the short side only. The barbarous relic has been in a bear market since it peaked at $1,922 an ounce at the end of August last year. Gold shares have fared much worse, with lead stock Barrack Gold (ABX) dropping 36% since then and the gold miners ETF (GDX) suffering a heart rending 43% haircut.However, the recent price action suggests that hard times may be over for this hardest of all assets. Despite repeated attempts, the yellow…

  • Gold Bugs - Keep An Eye On The Canadian Dollar To Keep Confidence

    It hasn't been the best of days for the gold bug community (of which I am proud to be a member). While we did open 2012 at $1564 -- and thus are up around 4% year-to-date -- the fear still persists, with rumors that the September 5, 2011 high of $1,920 is a top that will not be revisited for some time, if at all. The PDAC show revealed that our own industry was concerned about fundraising for future mining operations. Mainstream journalists like Joe Weisenthal are making fun of us.All those are contrarian indicators, of course, and the fact…