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2013

Mar 2013 - Conspiracies?

GOLD - the latest conspiracy theory - China ?

Gold has passed through various conspiracies holding it back such as the central banks (who famously once stated at a conference in Kalgoorlie that "we control the gold price"), and repeatedly announced that they were selling, together with encouraging hedging which was akin to pouring oil on troubled water or basically removing the volatility.

Apr 2013 - Commodity Prices

Commodity Prices have to be weak in 2013 !

....or at least that seemed to be the message that had been given to Chinese presenters ahead of last years' China Mining Conference in Tianjin in November 2012. Basically the Western presenters were relatively bullish, while the Chinese presenters were bearish about the prospects for most commodities during 2013.

May 2013 - China Rail

Give the contract to the Chinese

The latest proposed Australian Government plan for high speed rail between Sydney and Melbourne via Canberra (and including up to Brisbane) was released for discussion on ~10 April 2013 at an expected cost of $114bn with the first leg (to Canberra ready by 2030) and completion by 2053. Involving 144km of tunnels of which 67km of tunnel would be through Sydney.

Jun 2013 - Manipulation

Manipulation or Coincidence ?

Well, we all know what happened, the gold price collapsed by more than US$200/oz within a week in April 2013. Goldman Sachs (Goldmans) went from bullish/buy gold up to 9 April at ~$1570/oz through "short" gold on 10 April, only to "change horses" back again on 23 April at ~$1408/oz stating close the gold "short" positions, as the gold price could rise.

Jul 2013 - Broken Hill

Symposium's Broken Hill 2013 Conference

Following the Sydney RIU Conference we again attended Symposium's resource conference in Broken Hill. Though like most recent resource conferences attendance was lower than last year, the Symposium Conference still managed to achieve its "buzz" of delegates discussing aspects of companies in booths and its renowned camel races.

Jul 2013 - Gold Prices

What Should the Gold Price Actually be ?

Following the ~$200/oz fall in the gold price from ~US$1570/oz in early April 2013 to ~$1380/oz one week later, there has been yet another US$200/oz fall in the gold price more recently over two weeks (based on London pm gold price fixes) from $1391/oz on 14 June to $1292/oz on 21 June and $1192/oz on 28 June. Leaving many wondering just what should the gold price actually be ?

Aug 2013 - China's Demand

Don't underestimate China's Demand

It's almost as if the market wants China's growth to fail, jumping on any signs of weakness and knocking down commodity prices. It seems to pounce on HSBC's pmi (purchasing managers index) forecasts which have been shown to be wildly inaccurate by up to 2 points as in the June 2013 figures showing slowing down at 48.2 whereas the actual figure when later released was over 50 (50.1, seen as growth).

Sep 2013 - Against AISC

Against the AISC

Since its introduction by the WGC (World Gold Council) the proposed AISC (All in sustaining cash cost) method appears to have spread confusion and damaged share prices such as Silver Lake (SLR.ax) who were one of the first Australian gold companies to adopt it in their March Quarterly 2013.

Oct 2013 - Cutting Costs

Innovatively Cutting Costs

The fall in the gold price has caused gold producers to focus on cutting costs, in exploration, corporate, staff, and anything else. However, it has also resulted in a few innovations that we/ERA have not seen before, most of which we saw in our August 2013 visit to Silver Lake's operations, such as LNG power, contractor vending machines and a mini de-sal(ination) plant as shown in Figure.

Dec 2013 - Gold and Money

Gold and the Business of Making Money

Most Chinese gold company presenters were bearish at the China Mining 2013 Conference held in Tianjin in early November 2013, believing that gold would probably trade between $1200 and $1400 (or $1500/oz) for the next 2 years. CRU were more bearish, perceiving gold to trade at ~$1200/oz in 2017 (becoming effectively $1130/oz in real money terms).

Dec 2013 - Supercycle

The Supercycle is not over yet !

Or at least that was the comment made by at least 3 of the Chinese presenters in the commodity sessions spread over 4 days of the China Mining 2013 Conference held in Tianjin in early November 2013.

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