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Can the gold industry return to the golden age?

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Comments of the Day

07 May 2019

 

 

Video commentary for May 6th 2019

 

 

Eoin Treacy's view

A link to today's vide0 commentary is posted in the Subscriber's Area. 

Some of the topics discussed include: China sold off aggressively but Wall Street takes trade brinksmanship in its stride, Treasuries ease, upside key reversals on both oil and copper, tin very oversold, 

 

 

Wall Street Asks Whether Trump's Tariff Is a Tactic. Or Not

This article by Felice Maranz for Bloomberg may be of interest to subscribers. Here is a section:

Goldman believes a tariff increase may be “narrowly avoided,” putting odds that tariffs rise on Friday at 40 percent, Phillips wrote in a note.

Will be watching whether a large delegation of Chinese officials comes to Washington on May 8, as scheduled; canceling would mean an agreement in the coming week would “seem very unlikely,” and would make an increase in the tariff rate to 25 percent “the base case.”

China trade issues have “negative implications for the outlook for auto tariffs and passage of the USMCA [U.S.-Mexico-Canada Agreement].” Trump’s “willingness to risk a market disruption by threatening an unexpected tariff hike suggests that he might also be willing to risk the disruption that formally proposing auto tariffs or announcing the intent to withdraw from NAFTA might cause.” Phillips raised the probability that auto tariffs will be implemented later this year to 20 percent from 10 percent, and lowered the probability that USMCA will pass to 60 percent from 70 percent.

 

Eoin Treacy's view

How much of this is brinksmanship ahead of a crucial point in the negotiations or should we take the gambit seriously. That’s the big question everyone is asking today and it suggests there is likely to be a pause in buying at the very minimum, at least until we know more at the end of the week. Meanwhile it appears Liu He is travelling to the USA this week afterall. 

 

 

Email of the day on global liquidity measures:

I really think you are on to something here and you should develop your deficit chart and data set even more. It is always possible to refine econ data further, as any credible economist will attest.   Gavekal and others charge a fortune for “who’s supplying liquidity?” work as it’s key to fin mkts.  I would just observe that Friedmanesque/ Chicago school money theory is being severely tested as my client below notes…. velocity has simply not picked up as expected.  Hence the social Angst of the bottom  50%…versus top 1% ….rich get richer etc (Brexit, Trump etc)

Inflation or its opposite is “sticky”.  “The cause of inflation is…..inflation”.  Volcker had to jack rates far too high in 1980+ to reverse decades of inflationary psychology.  So it may be with its reverse, disinfl.  Maybe CBs have to keep rates lower for longer and even let ‘er rip, until the psychology changes (then MS and velocity finally pick up, pitching us into the next inflationary cycle).

Some good points below, from an LSE grad living in HK, a far better economist than I

 

Eoin Treacy's view

Thank you for your kind words and the attached analysis which highlights just how much money China has created, out of thin air over the last decade. Here is a section:

 

 

Can the gold industry return to the golden age?

Thanks to a subscriber for this report from McKinsey which may be of interest. Here is a section:

 

 

Eoin Treacy's view

A link to the full report is posted in the Subcsriber's Area. 

Miners of all hues are in the extraction business and that comes at a cost which varies based on both internal and external factors. When the commodity price is low, they have no choice but to mine the richest ore bodies available because to do otherwise would likely lead to insolvency. When prices rise, they engage in M&A activity because they have to replace that ore because grades have deteriorated.

 

 

2019: The 50th year of The Chart Seminar

 

 

Eoin Treacy's view

I have had word from the inestimable Mrs. Fuller that the London Philharmonic Orchestra are planning a memorial concert on October 5th at the Royal Festival Hall. It is envisaged that there will be drinks and canapes afterwards. Since this is the 50th year of The Chart Seminar we will be conducting the event on October 3rd and 4th.

I also plan on holding a New York event, potentially in June, and am in discussions with a partner in how best to organise it.

In the meantime, if you have any questions, would like to attend, or have a suggestion for another venue please feel to reach out to Sarah at [email protected].  

The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non-EU residents are not liable for VAT). Annual subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.

 

 

Eoin's personal portfolio: precious metal long initiated March 8th

 

 

Eoin Treacy's view

Details of this trade are posted in the Subscriber's Area. 

 

 

 

 

 

 

 

 

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