Friday, 12 May 2017

Global mine production of gold and silver

While explaining very long wave patterns in precious metal prices, it is often stated that "low prices are the cure for low prices". The underlying rationale is that low prices impose marginal mine production to close down thereby diminishing global output.  Resulting high prices would then allow mining companies to ramp up production by bringing on line mines and ore layers that were not profitable at the much lower precious metal prices.  These simplifications are tending to overlook the essential.


Wednesday, 26 April 2017

Regression between the Gold Price and the HUI miners index

The miners rally after end January 2016 has been almost miraculous, with the HUI index more than doubling over less than six months. Since mid August however, much of the gains have evaporated. That doesn't come as a surprise because gold now is back down to around $1260, from its 'lofty high' over $1360/oz both in the second week of July and early August 2016.
Graphs were updated on April 25, 2017.


Tuesday, 18 April 2017

Canadian Miners Performance Update

With the yellow metal well above $1250, miners have rallied from their correction bottom reached mid December 2016.  On April 12, the HUI index is up 33% from this mid December bottom, yet from its bear market bottom that adds up to a more impressive 115%.  However, from its August rally top the HUI still is down 25%.  Following tables shed light on how the individual explorer, developer and mining stocks performed during these hectic days.

Tuesday, 21 March 2017

Miners relative to gold: Long term charts on the HUI gold miners index

Miners and Gold bullion

There clearly is a good correlation between miners and gold bullion, which doesn't come as a surprise. However, when the much claimed leverage is concerned, it seems to get a bit tricky. There sometimes is upside leverage with miners outperforming a rising gold price. We've also witnessed miners lagging gold in its ascent. Yet invariably, gold retreating implies an ugly decline for gold miners. 

Thursday, 23 February 2017

Abnormal returns

The 2017 Credit Suisse Global Investment Returns Yearbook (CS-GIRY) has been released.  This is the kind of message part of the investment community is looking for in the second half of February.

Thursday, 5 January 2017

A case for the 'white precious metals'

The precious metal recovery in January last year was led by gold, with the white precious metals - especially silver and platinum - following reluctantly. The idea of a more sluggish growth in China translated into expectations of lower demand for industrial metals. In January 2016, copper quoted at a decade low.