Good afternoon
there is so much discussion going on, what should be done…and weather this unprecetended level of turmoil is in fact warranted by the virus. I think this is worth discussing - but we should not forget humanity in this discussion. Also, would a complete breakdown of the health system lead to social unrest etc? In my very personal opinion, I think the relatively hard lockdown we are currently seeing will have to reduce numbers of infections big time - everybody I know is behaving responsibly. Buying time for a cure, and hopefully also a vaccine at some stage, makes sense to me…
The best news is, that China seems to be back to 85% of normal economic activity. What remains to be seen is, weather this will also lead to infections rising again.
We are currently seeing a large, unvoluntary supply response by miners - many mines around the world, especially in copper and iron ore, are being closed - also some gold mines.
Once again, I think Australia is a relatively save place - but this could certainly change as well. So far, mining has full government support. The appointment of Nev Power ( former MD of Fortescue, and a director of our little Strike Energy ) to run an advisory commission to mitigate the impact of corona on business, has to be seen positive for mining and to for the government, to keep a cool head!
There seems to be turmoil in the physical gold market. normal gold dealers seem to be sold out , and even the Swiss banks have problems in getting their hands on physical supply. The closure of some refineries certainly does play a role here - god knows, weather the conspiracy theories of some banks being short gold big time will prove right. In any case, physical demand seems to be outstandingly strong, and that is good!!!!The GDXJ is also much less volatile today, which is also good - so far , it´s holding yesterday´s strong gains.
Base metals are green today - just….but across the board.
And equities are having another volatile day. Opening up to 5% higher this morning, the DAX for example traded down to - 2%, and is unchanged for the day now, while most of Europe is up by roughly 2% - as is the DOW . But this might change - who knows these days! The VIX has been coming down from recent highs, but has to come down quite a bit further until we have normality again!
Not all that much happening on the micro side today…
Have a nice evening!
WS