Lawrence Roulston: Every Reason in the World to Believe Gold Will Go Higher

GoldSeek

The Gold Report recently caught up with newsletter writer and analyst Lawrence Roulston of Resource Opportunities, who’s been travelling to learn more about the state of mining worldwide. In this exclusive interview, Roulston provides his thoughts on the outlook for the economy and what factors impact gold and other metal markets. “As the Western world gets back on track,” says Roulston, “commodity prices will continue higher.”

The Gold Report: Lawrence, you have just returned from trips to Dubai, Hong Kong and Europe. What does the rest of the world think of the health of the U.S. and European economies?

Lawrence Roulston: It is striking how different the outlooks are in different parts of the world. In North America, most people are totally focused on the U.S. economy, which is not looking that promising in the near term. Therefore, investors are quite gloomy. Europe is also not very upbeat. But, in Europe, they are more pragmatic and they tend to look a little further into the future. As a result, many European investors see this down period as a buying opportunity. Parts of Asia were hit hard by the slowdown, but there is still a lot of growth in China and India. China reacted quickly with an effective stimulus plan that is focused on building infrastructure. Growth there is forecast at 8% for this year. With enhancements to rail, roads, ports and the like, China will become an even greater economic force.

TGR: What is the Asian perspective on the importance of emerging markets to global economic turnaround?

LR: There is a myth that Asian growth depends mainly on exports to the West. Much of the economic activity in Asia is related to trade within the region. After the credit crisis, there was a severe shortage of export financing, which meant that exports plummeted. Now that financing is available again, activity is recovering throughout the region. Asians are far less concerned about the global situation than they are with what is happening in the region. With China, which is the third-biggest economy in the world, growing at 8%, it doesn’t really matter what happens in other regions. Once upon a time, Asian growth depended on exports to the West. Now, the West will benefit from growth in Asia.

TGR: What do investors in other regions think about precious metals and the U.S. dollar?

LR: Investors are very nervous about the outlook for the dollar, but it remains the global currency. With uncertainty remaining about the U.S. financial system, gold has become more important as a currency hedge, as an inflation hedge. People can see the long-term downtrend in the dollar. As a result, the dollar is seen more as a medium of exchange. It’s held for the short term, by most investors. Of course, the Chinese government holds most of its $2 trillion dollars worth of foreign currency reserves in dollars. There is growing nervousness about that huge exposure and moves away. In part, the government is buying commodities.

Read more….

Ira Epstein’s Weekly Metal Report

The Seasonal Gold Chart above displays gold price movement in several ways. First, the red arrow shows where we’re at now. Next, the blue line is made up of the past 15-years of data to calculate a current average of prices. The red line covers the past 35-years of data, showing a longer averaged time frame. Historically speaking, prices trends are fairly erratic to lower in summer months. It’s at the end of summer that uptrends often take hold.

That having been said, gold’s tendency is to weaken right now, bounce a bit into July and have a final downside washout near month’s end. The important thing to remember is that in terms of market momentum, the month of July often sets the seasonal low going into fall and winter.

Iran, North Korea, Nigeria, China

The hotbed this week centers on what’s going on in four countries. When gold is in a bullish mode, almost any mention of problems in terms of armed conflict or political unrest has a bullish influence on gold prices. The opposite is true when gold puts on its bearish face.

Read more….

California on the Brink

June 30, 2009

Armageddon. Apocalypse. Disaster: These are the words being used to describe California‘s staggering $24 billion budget deficit. With a midnight deadline to balance the budget, state lawmakers are facing a daunting task: Find a way to bridge the gap or start issuing $3 billion in IOUs this week to cover the bills.

Almost every state is suffering from the effects of the recession, but not every state accounts for 12 percent of the national gross domestic product. According to AP,
if California goes down, so goes the nation: California’s annual $1.7
trillion economy is the world’s eighth-largest economy and provides a
significant chunk of tax revenue for the government; California alone funds many social programs for the entire nation.

Like the Big Three automakers, California may be “too big to fail.” If
the state implodes, the ripple effect could slow the entire nation’s
recovery from the recession. Burt P. Flickinger, a retail consultant, tells AP:

“California
is the key catalyst for U.S. retail sales, and if California falls
further you will see the U.S. economy suffer significantly.”

How did California dig itself such a huge hole? The recession certainly didn’t help, but Time’s Kevin O’Leary
writes that California’s financial troubles can be traced back to the
passage of Proposition 13 in 1978. An antitax measure, Prop 13 makes it
extremely difficult to raise taxes or pass a budget unless a 2/3
majority in both state houses agree — a virtually impossible task. California Rep. Zoe Lofgren tells Politico:

“If we [in
Congress] had to do what the California legislature does, we would
never send a bill to the president of the United States,” she said.

If the political wrangling over the budget isn’t resolved by midnight tonight, Californians will be feeling the pain on every level, big and small. Just a few of the proposed spending cuts:

— State employees will be forced to take another day of unpaid leave a
month, in addition to the two days leave they were forced to take
starting in December. (NYT)

— Funding for the Bureau of Narcotics Enforcement will be slashed by
$20 million. The “little-known unit” has played a key role in several
of the state’s high-profile cases: The bureau’s agents helped arrest
Scott Petersen for the murder of his wife and unborn child, and their
investigation led to charges in Anna Nicole Smith‘s overdose death. (AP)

— 80 percent of state parks
would be closed, 25 in the Bay Area alone, including several beaches
along the peninsula. Park visitors spend an estimated $2.6 billion a
year in and near state parks, but closing the parks would save only .26
percent of the $24 billion deficit. (SF Chronicle)

— Education funding would be reduced by $5.3 billion. School districts
have already laid off 30,000 employees. Class sizes are expected to
surge from 20 to 30 students and many after school programs, arts and
music classes will be cut. A national education survey conducted this
year ranked California 47th in per-student spending. (AP)

— Gov. Schwarzenegger is proposing to eliminate the state’s $1.3
billion welfare program. Frank Mecca, the head of the County Welfare
Directors Association of California, tells Time, “California could become the only state in the First World without subsistence benefits for poor children.”

So far, the government is using a “wait and see” approach to California, or as a recent Politico headline stated more bluntly — “Washington to California: Drop dead.” Earlier this month, White House spokesman Robert Gibbs said
that the administration would “monitor” the situation, but that
California’s “budgetary problem unfortunately is one that they’re going
to have to solve.”

(Think you can do a better job at balancing the state budget than the governor or state lawmakers? The Los Angeles Times is letting the common folk try their hand with a “You balance the budget” interactive.)

Read more….

Gold coins to be produced for cricket games

Limited edition gold coins are to be produced following the formation of a new partnership between the England and Wales Cricket Board and the Royal Mint.

A total of 150 pieces made from the precious metal will be manufactured as a result of the partnership, which has been overseen by CPLG Sport, Licensing reports.

The items will sell for £1,600, while five are to be used for the coin toss in each of the five Tests of the upcoming Ashes cricket series, which begins next month.

These will then be auctioned off to the highest bidder at a charity event later in the year.

Commercial manager at CPLG Sport Tom Roe told the news source that the firm is "delighted" with the partnership.

"Meeting the predilections of cricket fans and coin collectors alike, the timeless product from this unique collaboration is set to be the ultimate souvenir," he stated.

In related news, it was recently announced that the People’s Bank of China is to introduce a range of gold coins to mark the 2010 World Expo, which is being held in Shanghai.
The news feeds on this site are independently provided by Adfero Limited © and do not represent the views or opinions of the World Gold Council.

Read more….

Rare gold coins on display at Singapore museum

A new museum showcasing a number of rare gold coins is due to open in Singapore tomorrow (July 1st).

Located on Trengganu Street in the Chinatown area of the city-state, the Singapore Coins and Notes Museum has been constructed within a restored townhouse.

Planning for the venue – which aims to showcase the evolution of Singapore’s currency – began last year and the museum has the backing of both the country’s National Heritage Board and the Singapore Mint.

According to the Straits Times, one of the items made from the precious metal that will be available for viewing dates back to the 13th century.

An exhibition that opened in the US earlier this month also has a historic gold coin on display.

Stories on Money, which is being held at the National Museum of American History in Washington DC, began on June 12th and features a gold item dating back to 1849.
The news feeds on this site are independently provided by Adfero Limited © and do not represent the views or opinions of the World Gold Council.

Read more….

Centamin begins gold production in Egypt

Production is underway at Egypt’s first modern commercial gold mine.

Centamin Egypt announced that gold began to pour from the Sukari Gold Project on Friday June 26th.

Managing director and chief executive of the company Josef El-Raghy explained that the site represents the largest mine to come on-stream so far in 2009 and predicted that annual capacity will reach 200,000 ounces by the end of the year.

An increase in production is expected in the coming months and Mr El-Raghy remarked: "The delivery of initial gold production in June 2009 is testament to the extraordinary hard work and professionalism of the entire team at Centamin."

He also praised the Egyptian government for its cooperation with the project, referring to minister for petroleum and mineral resources Sameh Fahmy in particular.

Centamin has been carrying out exploration work in the country since 1995 and completed a feasibility study to upgrade the Sukari site in February 2007.

The news feeds on this site are independently provided by Adfero Limited © and do not represent the views or opinions of the World Gold Council.

Read more….

Mining industry faces ‘tough road ahead’ – PwC

Mining companies have some difficult decisions to make if they are to reduce costs and protect margins in the prevailing economic environment, professional services group PricewaterhouseCoopers (PwC) said in a report published on Tuesday.

"There is no doubt that the industry is facing a tough road ahead," said PwC US mining leader Steve Ralbovsky.

Read more….

Ferrochrome bender

Alwyn Smit, a South African with a penchant for Swiss villas, drives a merger between Ruukki and Sylvania, amid two of the world’s most bombed out mining subsectors, but valued by the market at USD 1bn.

Read more….

Platinum in a tough casino

Jubilee Platinum, and other strange stories, as bottom fishers speculate on which noble metal names may rise from the ashes.

Read more….

Gold: Technical Analysis

Bullion Vault

A reading of the key technical indicators of RSI, MACD and volume…

The AGE-OLD CONTRAST between fundamental and technical analysis was highlighted last week, writes Brad Zigler of Hard Assets Investor, when a reader of our site commented that:

“I love how commodities investors are focusing on the fundamentals, while people who are currently overweight equities can’t shut up about the technicals.”

Fundamental analysis uses economic, political and environmental data to forecast future price movements, while technically derived predictions rely upon price patterns and changes in market volume. Commodity traders often use “the technicals” as well as fundamentals when making market decisions.

It should come as no surprise, then, that Hard Asset Investor articles cite metrics from both disciplines to present a broader perspective on a market’s potential for consolidation or breakthrough.

The price charts that accompany many of our articles often include some of these technical indicators. Take, for example, the chart for August Gold Futures below (current as of June 22), showing three technical indicators: MACD, RSI and volume.

Read more….

« Previous Page — Next Page »