US Holiday jewelry sales expected to skyrocket

According to Mastercard SpendingPulse, US jewelers can expect revenue from jewelry sales in the US between November 1 and December 24 will grow 59% compared to the same period last year.

17 september 2021

Australia becomes world’s biggest producer of gold for first time

Australia has become the world’s biggest producer of gold for the first time, having played second fiddle to China for the last decade. Australia unearthed 157 tons of gold in the first half of the year, pipping China by four tonnes.

17 september 2021

Nigerian minister mulls death penalty for gold smuggling – report

Nigeria’s deputy minister in charge of mines and steel development has called for the death penalty for gold smuggling in the West African country.

17 september 2021

Gemfields back to black

Gemfields is expected to register a net profit after tax of $23.8-million in the first half of the year compared with the net loss after tax of $56.7-million, a year earlier. Earnings per share are expected to be 2 US cents from a loss per share of 4...

17 september 2021

Debmarine Namibia's new diamond recovery vessel to arrive in SA next week

Debmarine Namibia’s new N$7 billion diamond recovery vessel, Additional Mining Vessel #3 (AMV3), is expected to arrive in Cape Town, South Africa next week ahead of commissioning early next year.

17 september 2021

Precious Metals Market

11 january 2009

In her comments posted on Mineweb, Rhona O’Connell, Managing Director of GFMS Analytics Ltd., the world's foremost precious metals consultancy, specializing in research into the global gold, silver, platinum and palladium markets, says the latest metals monthly report from Fortis/VM Group suggests that the majority of the metals markets must expect further price declines in the first quarter of 2009, before a recovery that will take prices higher by year-end; although gold will be more robust.  The Group's price forecasts expect gold to be, at $850, at the same level in twelve months' time as it is now (and, for that matter, as it was twelve months ago, more or less), while looking for $12 silver, $900 platinum and $180 palladium, an increase of 13% for silver, of 6% for platinum and no change for palladium.  For the longer term the views are bearish for gold and silver, but bullish for platinum and palladium.  Recoveries are also forecast for the base metals. On the basis that the Great Depression has been cited by some market commentators as a precedent for the current environment, although it is a minority view with economic policy generally believed to be wiser now than it was then, the review takes the opportunity to look at the performance of the metals markets during the Great Depression. The study suggests that the quicker price adjustment experienced this time should lead to a quicker recovery also; this should be underscored by the rapidity with which governments have increased deficit spending and very loose monetary policy - although this may be storing up inflationary problems for the future.

Mineweb’s Lawrence Williams in his Gold Analysis says that oil, and to a lesser extent gold, recorded a strong price surge on the final day of the year, which could be bad news for the U.S. dollar, but positive for precious and base metals at the beginning of 2009. Oil, in his opinion, is arguably the most oversold commodity of all in the markets having fallen from $147 a barrel in July down to as low as $32 a barrel in recent weeks, despite OPEC's avowed policy to cut production by some 2.2 million barrels a day to destabilize prices at a higher level. Indeed OPEC would like to see the oil price back to $100 a barrel and certainly has the muscle, if perhaps not the will, to continue production cuts until this is achieved. But if stronger oil prices could lead to a weaker dollar (its strength further eroded by the huge increase in money supply being pumped into the economy by the government to try and avoid prolonged recession) and a weaker dollar generally means a stronger gold price. $100 oil would probably mean on balance $1,000 gold going on historic ratios - so the potential (probable?) rise in oil price is not necessarily a formula for huge gold price gains, but sufficient to give the gold mining sector a good fillip and bring selected gold mining stock prices back to their peak levels. But the market is likely to be much more sophisticated in its analyses of gold stock values having had its fingers burnt badly in the past year so it will be important to pick stocks that boast underlying strength and strong finances. The year-end boost in the gold price, albeit in pretty thin trading because of the holiday period, has taken it up through what had seemed to be a strong resistance level so there would seem to be decent potential for at least a little growth over the next few months, but market nervousness and volatility could see the price hitting a series of successive peaks and troughs as the market tries to stabilize.

In another Mineweb commentary the author casts a look at what may be in store for precious metals and precious metals miners in the year ahead.

According to Lawrence Williams, gold has been one of the best performers in the general market crash seen in the past nine months. The metal price is actually higher at year end than at the beginning and not many commodities will have achieved this accolade! The more cautious analyst would see gold primarily as both a hedge against inflation and deflation and also a reflection on the perceived strength, or weakness, of the US dollar rather than a vehicle for making quick and large profits. In these terms it may be necessary to take a relatively cautious viewpoint on gold.  The recent heavily reported surge in demand for physical gold is not necessarily because people are looking for huge gains in price, but primarily because of the lack of trust in banks and investment institutions and a protection against possible failures in these sectors.  In the current climate wealth preservation is the primary aim of most people – not necessarily wealth growth, although in a deflationary scenario, which some anticipate, these can amount to much the same thing. The consensus is that if the gold price does fall back the downside potential is much more limited than that for the stock market as a whole.

Silver is a bit of a different animal, but does tend to ride on gold's coat tails – but in a far more volatile manner given its production patterns and industrial usage, Mineweb says.  Unlike gold, silver fell back 57 percent from peak to trough and will likely continue to be far more volatile than gold in the months ahead.  If gold does surge, then silver may do even better in percentage terms.  If gold falls there is the possibility silver will do even worse. To an extent silver as a commodity is a bit of a red herring – or it is at the moment.  While more and more uses are found for the metal in emerging communications and bacteriological fields and supply may well be primarily dependent on byproduct output from zinc and lead mining, where huge closures are taking place, the main drivers remain in its position as an investment vehicle and in the jewellery market.  Price movements remain very much tied to gold and it is in the performance of the latter where sliver's potential for price increase, or decrease, really lies.

Then there are the in-between metals – notably platinum and palladium – the former having suffered one of the biggest falls of all during the past year, Lawrence Williams writes.  The price fall was dramatic as auto sales collapsed in the second half of the year on global economic paralysis following the banking collapses, huge governmental bailouts and a generally very pessimistic view of the short to medium term economic picture.  With auto catalysts accounting for by far the bulk of platinum use, there is unlikely to be a serious pick-up in platinum price until the true auto (and platinum) demand picture is clarified in the months ahead.  For the moment platinum seems to be stuck at a level marginally above or below the gold price and this could well continue for a few more months, depending on where gold goes from here.  This has happened before.  But any discount to gold may be shortlived once global industrial output begins to pick up with most specialist analysts predicting a return to plus $1,200 platinum in 2009.  It would not take much of a movement to get it there. Palladium seems to be in a different position.  Supply was in surplus prior to the auto industry nosedive and the price looks as though it remains vulnerable with little upside potential on the fundamentals front.  However, global supply is largely dependent on Russian exports and these could be cut off if the Bear sees it to be politically or financially advantageous.  The West's largest primary palladium producer – the Russian owned U.S. miner, Stillwater, is struggling at the current palladium price and is already having to close down sections of its Montana operations as uneconomic.  Unless there are, indeed, curtailments in the supply position, palladium's short term does not look promising.  Longer term it looks better as it continues to erode away platinum's usage in autocatalysts, but this is a slow process.  Marketing is also being put into the palladium-as-jewellery sector, but here again progress is slow and the take-up of physical metal is not that significant in the overall picture.