News - Prospector's Diary

One door shuts and another opens. That’s the best way to see this week’s change-over in commodity market sentiment

One door shuts and another opens. That’s the best way to see this week’s change-over in commodity market sentiment as iron ore started its inevitable decline after a spectacular 12-months to be replaced by strong demand and higher prices for copper, nickel and gold. The flip will not be immediate or universal but the trend is there for anyone to see, once you get past the latest outbreak of Covid-19 panic in the US and other parts of the world, including Australia’s own problem State, Victoria.

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“Greenlit” is the new description of gold, which traded this week between the tramlines of $US1710-and-$US1730 an ounce but could soon be heading for $US1900/oz as negative virus and geopolitical news dampened enthusiasm for rival assets

“Greenlit” is the new description of gold, which traded this week between the tramlines of $US1710-and-$US1730 an ounce but could soon be heading for $US1900/oz as negative virus and geopolitical news dampened enthusiasm for rival assets. Signs of a second wave of COVID-19 in China and the US destroyed confidence that the worst of the economy-sapping virus had passed.

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Just about everything else fell this week but gold reclaimed its star status with a rise of $US50 an ounce after a promise from the US central bank that there will be no increase in official interest rates for at least another two years

Just about everything else fell this week but gold reclaimed its star status with a rise of $US50 an ounce after a promise from the US central bank that there will be no increase in official interest rates for at least another two years. The problem with the no-rate increase comments from the Federal Reserve chairman Jay Powell is that while they might be good for gold, they reflect a downbeat outlook for US and global growth.

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Gold took a back seat to other commodities this week as investors decided that the Covid-19 pandemic is over and it’s time to make some money.

Gold took a back seat to other commodities this week as investors decided that the Covid-19 pandemic is over and it’s time to make some money. It might be stretching the point but one interpretation of recent events is that financial markets have “de-coupled” from politics and assorted health and public order concerns such as those seen in US unrest.

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The first whiff of a sustainable economic recovery wafted across the Australian economy this week, boosting banks and miners of industrial metals while rubbing some of the gloss off gold stocks....

The first whiff of a sustainable economic recovery wafted across the Australian economy this week, boosting banks and miners of industrial metals while rubbing some of the gloss off gold stocks. Reserve Bank Governor, Philip Lowe, painted a rosy picture about the outlook when addressing a Senate committee yesterday with his words forming the basis for the all ordinaries index cracking the 6000-point market for the first time since early March.

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Australia’s iron ore producers are riding a perfect storm of reduced Brazilian supply and surging Chinese demand which has lifted the benchmark price of the steel-making material to within sight of the magic $US100 a tonne mark ...

Australia’s iron ore producers are riding a perfect storm of reduced Brazilian supply and surging Chinese demand which has lifted the benchmark price of the steel-making material to within sight of the magic $US100 a tonne mark – before possibly surging to $US120/t. Share prices of every company exposed to iron ore, including Fortescue and Mineral Resources, have moved up sharply, reaching 12-month highs in most cases, but the story of recovery and fresh heights being reached, does not end there.

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Corporate moves, including takeovers and fund raising, took the limelight this week as the destabilising effects of the Covid-19 pandemic continued to hit most commodity markets, except gold.

Corporate moves, including takeovers and fund raising, took the limelight this week as the destabilising effects of the Covid-19 pandemic continued to hit most commodity markets, except gold. Chalice led the fund-raising, attracting $30 million in fresh capital to accelerate work at its promising Julimar palladium and nickel discovery near Perth. Such is the interest in Julimar and palladium that Chalice could have raised more than double what it accepted with applications for the new shares, priced at $1.05, totalling $75 million.

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A “rolling bottom” might sound like a medical condition but it’s actually one of the more encouraging signs of normality returning to financial markets

A “rolling bottom” might sound like a medical condition but it’s actually one of the more encouraging signs of normality returning to financial markets. First observers to spot the feature, also known as a “rounding bottom” on graphs which track the world’s economy, were analysts at the investment bank, Morgan Stanley. In a report on the health of global manufacturing, the end-market for Australia’s natural resource exports, the bank asked earlier this week: “Did April mark the bottom for manufacturing purchasing managers indices?”

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