Kitco News launches its Outlook 2015 series with none other than Exploration Insights’ Brent Cook to find out how he sees the mining industry set up for the coming year. “I honestly think we’re going to have another rough year,” he says. “I think next year is going to be tough, but I also honestly believe it’s the best year we’re going to see to start leveraging into some of the better companies.” Cook also shares his thoughts on the gold price.
Eldorado Gold has aggressively pursued building mines in ‘tricky’ jurisdictions – in particular China.
But right now, Eldorado Gold is looking to restructure its ownership of the Chinese assets.
The over-hyped Swiss gold referendum led to volatile trading for the yellow metal last week. That continued into this week with safe haven buying after the announcement of an early election in Greece and the resultant short covering continued that volatility. However, it’s very plausible that the coming week will show gold with even greater swings.
The gold and silver miners put in a good today bouncing back with the Amex Gold Bugs Index, the HUI gaining 5% to close at 175. The clamour will be for the resumption of the bull market rather than a short squeeze which caught the bears having a nap.
The economy in the Eurozone is struggling at present and has been for some time now. Consistently low inflation has significantly increased the risks of deflation in the region. In response to this the European Central Bank (ECB) has taken unprecedented action by cutting interest rate to negative levels, and then dropping them again. On top of this the ECB has introduced quantitative easing (QE) to combat the economic risks of deflation and announced in their meeting last week that they are now preparing to increase these measures.
Notwithstanding the other effects that this action is likely to have, of which there are many, we believe that that this increase in QE in Europe will have a highly bullish effect on the European equities markets. The first reason for this is that the ECB’s QE has so far been, and is very likely to continue to be, targeted towards actually stimulating growth in the economy, in a similar way to QE3 in the US, rather than broad based actions that pumped money into the system to avoid a collapse as QE1 and QE2 did. This means the ECB’s new measures are likely to stimulate growth over the long term.
Submitted by Alasdair Macleod via GoldMoney.com, to Zerohedge.com
The hypothesis that follows, if carried through, is certain to have a significant effect on gold and the relationship between gold and all government-issued currencies.
The successful remonetisation of gold by a major power such as Russia would draw attention to the fault-lines between fiat currencies issued by governments unable or unwilling to do the same and those that can follow in due course. It would be a schism in the world's dollar-based monetary order.
There are many factors that affect the overall movement of the stock market. However, today we will consider just one of these, one that we believe carries considerable weight and is key for predicting the how stocks perform: momentum. Through our analysis of momentum we have produced a model based momentum trading system (SK Momentum System or SKMS), which boasts a Sharpe ratio of 3.49 since 2002 and a return of 57547% since 1950.
The reasons that momentum is such an important factor when considering the future movement of equities markets can be broken down to the old adage, “the trend is your friend”. If stocks are trending higher investors are more likely to buy than sell, as they believe that the rally is likely to continue. The result of this is rising stock prices will drive prices even further higher, at least for a while, as new investors bet on the trend continuing. There is a similar phenomenon when equities are falling, as a small selloff can cause a larger panic that forces prices much lower and at a faster pace. Thus, momentum in stocks can drive rallies higher and selloffs lower than their underlying causes. We consider equities to be more momentum driver then many other markets such as bond and currencies, due to their status as a key confidence barometer.
Results for Swiss gold referendum were released today, ending weeks of enthusiastic bulls calling for gold to rally to new highs on a “yes” vote and countless articles speculating about the impact of the result. The Swiss people voted overwhelmingly against the policy of that would have caused the Swiss National Bank to significantly increase their gold reserves. However, the excitement and the speculation around the potential impact of the result represents a misunderstanding of the event and indeed, the gold market as a whole.
The chances of the proposal being passed in the first place were slim. The potential negative affect on the Swiss economy, the opposition from SNB and, as shown by the polling figures, the Swiss people, were all factors that made a rejection highly likely. However, even if one believed the contrary to these indications and that the Swiss would vote in favour of the proposed measures, why would that make them bullish on gold?