-- Posted Thursday, 3 May 2007 | Digg This Article
Number four global gold producer, Gold Fields of South Africa, reported this AM and keeping the major producer reporting trend in tact, reported worse than expected top and bottom line earnings while also producing less gold than expected. AngloGold and GoldCorp are the remaining senior gold producer left to report in the market. AngloGold reports tomorrow AM, so we will have the last major corporate hedge position update in the quarter.
Just announced this morning, Coeur d'Alene Mines Corp. will merge with Bolnisi Gold and Palmarejo Silver and Gold Corp. to create the world's largest primary silver producer. As has historically held true with all major mergers in the metals market in the last decade, the end result will be lower production into the market over the long term.
Gold and silver look to be holding steady this morning after a bruising last week in the market. While we failed to jump over the $700 level and maintain it, we've made another "higher low" on this pullback and appear ready to resume trading higher. The important point to note is that unlike other periods of trading weakness recently that have been blamed on numerous dubious and minor factors affecting the market, it's become obvious that the increased supply into the market has caused the price weakness.
Update:
If you're sitting there wondering why gold has gone up $6 per ounce in the last 30 minutes on no news, the quick answer is the London Market closed.
All of the major physical trading takes place on the London exchange. When those physical sales stop taking place during the day, you get a pop like we're seeing right now. No other news is hitting the market that would cause this drastic flip, which has become quite a regular event in the market.
In the last 30 trading days (when we've seen these elevated levels of bank sales into the market), the day's bottom has been made during the London market open 84% of the time, with an average price recovery of nearly $5 per ounce into the COMEX close.
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-- Posted Thursday, 3 May 2007 | Digg This Article
