Barros Conti
Barros Conti
base capital companies criticism deal destroying falling few gold issues last metal mode prices producers sector shaky survival waste wave
There's been a wave of consolidation in the sector over the last year. The world's gold producers have been functioning in survival mode for a few years. They've had to deal with the same issues as other base metal companies -- shaky demand, falling prices for commodities and criticism for being a waste of capital and destroying shareholder value. That's changing.
direction dollar exchange expensive less lower overseas traders weaker
Also, with uncertainty about the direction of the U.S. economy, and a weaker dollar, that actually fares well for gold. A lower dollar makes it less expensive for traders overseas to exchange gold.
closed commodity events gold kinds last people pressure reaction shown strong tend
Gold has shown a knee-jerk reaction to the events over the last two days. It closed up to the better side. The commodity had been under some pressure lately, especially with a strong dollar. People tend to look at other hedges in times of inflation. Unfortunately, gold usually reacts to these kinds of crises.
activity couple days declining due funds gold good holding level lock mutual recently redemption seen selling stock stocks
The other thing is the redemption going on mutual and hedge funds due to declining stock valuations. We've seen a good level of liquidation recently where some of these funds that have been holding gold stocks are selling them to lock in profits. This kind of activity is still going to take a couple of days to unravel.