Good afternoon
great Factory Orders for Germany out yesterday - bad Industrial Production numbers today - I guess the future is more important, hence I regard the Orders as being more important. I think it´s fair to say, that manufacturing around the world is still looking strong.
The small tightening in China late last week scared investors off a little as a possible precursor of more to come - but the small correction of steel rebar and iron ore reverted somewhat today.
The big story in metal markets I guess is gold, though. It´s now not only the Germans buying gold - the US Gold ETF has also attracted some fresh money over the last few days. Perhaps Trump is scaring even some Americans these days...Gold has broken resistance at around 1220 US the other day, and finally, it´s also looking stronger in A$, following a 6-week sideway move. Australian gold stocks have corrected over the last few weeks, and generally spoken, I think we need a rising A$ gold price now for any significant price action from here. The only one still in the doldrums is probably Perseus - I think there got to be a realistic chance, that they will fall out of the big US-Index soon, for having a much smaller market cap, which might not qualify anymore. Fundamentally, the move is probably overdone - unless they need more money shortly, which should not be the case, if things go according to plan.
Cardinal Resources - announced some nice extensional drilling results today - most of them better than their reserve grade so far, and indicating, that the expectation of some, that the current resource of 4 mill oz could ultimately be as as large as 5-6 mill oz. The metallurgical results last week went some way to alleviated the fears of very low recoveries from the slightly complex ore. The stock has had a nice move, and I would probably want to see some more clarity to these issues, before I commited any money to the stock. Let´s not forget, that the events of the last few month have taught investors once again, that good management is an integral part of a good development story!
Otherwise, it´s not much to report these days - all companies have issued their Quarterlies until last week, and the financials have not started as yet.
Have a good evening
WS