Good afternoon
like the markets, and probably like you., I am very divided currently…. while I am expecting some retracement of very quick and strong runs across the world in equity markets, and potentially even a second leg - especially once the reporting season fo the current Quarter will see some very ugly numbers in June, the story from last years could also be turn out to just continue: Central banks around the world keep everybody flush with liquidity, and governments are spending big time and in never before seen numbers…interest rates will stay very low , and the money has to go somewhere in the hunt for returns! This could even happen, if we get some inflation - no country I know of could sustain much higher interest rates! And asequity markets tend to look forward by about 12 month, what they see, could be pretty good again!
So I am very hesitant to reduce my exposure…
And especially not in resources with some inflation, equities could be a good investment - but resources equities should be an even better one!
Norilsk - is now expecting a 100.000 oz palladium surplus. Only a few month ago, they expected another large deficit ! The car industry is on it´s knees in the moment, and they are the biggest consumer of it. They also expect a surplus of nickel…150.000t or about double the size as expected by Macquarie. On the other side, I am reading of a very difficult re-opening of South African mines - the unions are not happy with the security of the workplace ( and tehy are probably right?).
BofA are seeing the gold price at 3000 US$ in 18 month time! Unusual for a major investment bank to come up with such an agressive recommendation for gold! In any case, there seems to be a lot of buy-the-dip buying around, and gold is looking good again today….back up through 2700 A$/oz as well! When I read about Europe preparing a 2 Trillion package, I can only say one thing: Buy the only currency not backed by a bancrupt country!!
Not much on the micro-side…
Have a nice evening
WS