Copper prices have fallen off a cliff since June, and not even China’s massive stimulus has bucked the trend. But Sara Nunnally says one Chilean mining firm is still planning a major expansion in production over the coming years. This could mean big profits for the company’s three major financial backers (AAUK, XTA, MITSY)… provided they survive the current commodity slump.
As the financial services giants get cut down to size, metals are now the biggest source of mergers and acquisitions on Wall Street, according to a report on Bloomberg.
The value of announced mining takeovers more than tripled to $199 billion in the first five months of 2008 from a year ago – the first time mining mergers have topped Bloomberg’s mergers and acquisitions table since it began 1998.
Meanwhile, gold prices are set to reach record levels, says Mike Caggeso in Money Morning.
Gold futures closed 2.9% down for the week, despite a rally on Friday, as the greenback rose against the euro and other major currencies.
“I see that Dennis Gartman is talking about gold again,” says Ed Steer in Casey Research.
Here are a few words from his early Thursday morning commentary….”If the governments of the world are now as concerned about inflation as we think they may be, and if they are even more concerned about the prospects for a generic, rising inflationary psychology amongst the public at large
Neither gold nor silver showed any signs of life until the Sydney market closed in their afternoon.
For the most part, both gold and silver got sold off early in Thursday trading in the Far East and Europe. Silver showed a little spunk just before the Comex open, but that was it. However, the moment the Comex opened, gold was smacked for about $8…and silver was knocked down about 25 cents.
Copper prices have risen in London trade on news that US manufacturing data contracted less then expected in May.
This from Casey Research:
“‘Copper’s fundamentals this year are very supportive — this is a market in deficit. We would expect to see any further drop from these levels as being short-lived,’ said Gayle Berry, metals analyst at Barclays Capital.
Both gold and silver did virtually nothing on Thursday until shortly after London opened. Then (just like Wednesday) a sell-off began in both metals which lasted until shortly after the Comex opened in New York.
Wall Street firm Goldman Sachs made the term “BRICs” famous in a 2003 research report.
The rising US inflation rate is dampening policy makers’ appetite for more Fed rate cuts, even if the economy sinks into a recession, according to recently released minutes of its last policy meeting. This from MarketWatch:
Surging prices for gasoline, food and other commodities forced the Fed to sharply boost its inflation outlook for this year, but not for next year. At the same time, their forecast for economic growth this year was revised much lower this year, with a rebound next year still in the cards.
Both gold and silver in the Far East didn’t do a thing until London opened for business on Wednesday morning.