-- Posted Monday, 25 June 2007 | Digg This Article
Peru's production still falling...
There isn't much news out today from a fundamental standpoint. The market seems to be on hold until we get word out of the Fed about their take on the slowing economy and just how much inflation is present in the system. It does seem like global monetary authorities like the IMF and BIS are prepping the global economy for some wicked consolidations in the near future.
We are going to start getting some company reports in the next two weeks along with some production figures updated from countries. A combination of news about continued lower production figures, slowing central bank sales and South African production heading offline will light a fire under the market.
News just out from the globe's 5th largest gold mining country, Peru, has shown another month of falling production figures. Gold output for May fell 28 percent year-over-year and silver production fell 11.4 percent. The production losses will eventually level off, but this is the sixth straight month of double digit production decreases out of Peru. Supply gaps to end users in the gold market were bridged in the first four months of the year by bank sales, now production is still falling and the bank sales are beginning to dry up.
The past week's restart of negotiations in the gold sector in South Africa and the deliberate bridge building by some of the involved bureaucrats highlights just how contentious the negotiations should be in the coming weeks.
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