Gold price may double in long-term: Citigroup Profit-taking by investors on a firmer U.S. dollar and a seasonal slowdown in fabrication may be working against gold, but spot prices continue to remain strong near the US$920 per ounce mark. And bullion could climb much higher if things don’t change significantly, according to a new report from Citigroup.Mining and metals analyst John Hill said the mix of macro and supply/demand factors, along with the same forces that have pushed gold higher for the last five years, give him good reason to remain bullish on gold. He sees prices climbing through 2009 and 2010, but a significant lift may not come until the fall when fabrication constrains supplies.
Goldcorp confident of 4-digit gold price this year Goldcorp President and CEO Kevin McArthur Tuesday said he is certain that investors will again see four-digit gold prices this year with the potential to "go well into the four digits." However, during Goldcorp's AGM Tuesday, the question-and-answer session was dominated by environmental and human rights NGOs, anxious to declare their strong beliefs that Goldcorp should stop doing business in Honduras and Guatemala. Before the Goldcorp AGM had even commenced, two UK-based charities urged pensioners in the United Kingdom to put pressure on their pension fund managers to in turn influence more than 130 mining companies listed on the LSE. Among their targets was Goldcorp's San Martin mine in Honduras.
Palladium may see renaissance from funds Lured by a relatively low price and cheaper investment costs, investors could well warm again to palladium, left in the cold by investors after market restrictions and price volatility in the early 2000s. Palladium rose in March to its highest level since 2001, renewing investor confidence in the precious metal, and analysts say a bullish outlook for its sister metal, platinum, could help spark yet another rally. Cash-rich investment funds could see palladium, used in car exhausts, jewellery and dental equipment, as an alternative to gold or platinum as both metals have hit lifetime highs. "I see potential in palladium. It is still far behind the value of platinum and gold," said Akira Doi, director at Daiichi Commodities Co Ltd. "As long as platinum is strong, palladium will be supported.
Oil futures top $130 a barrel ahead of supply data Crude-oil futures broke through another key level on Wednesday, this time topping $130 a barrel on the familiar fears that supplies can't keep up with growing demand from emerging markets. Crude oil for July delivery, the new front-month contract, rose 26 cents to $129.24 a barrel on the New York Mercantile Exchange. Earlier Wednesday, crude surged to a record high of $130.47 in electronic trading. The U.S. Energy Department and American Petroleum Institute will release two separate reports on oil inventories in the latest week. Supply "data comes out later today, but we doubt this will dent the bullish spiral; the market seems to have moved beyond the week-to-week changes in inventories," said Edward Meir, an analyst at MF Global, in a research note.
Shortage fears push oil futures near $140 Fears of a shortage within five years propelled long-term oil futures prices to almost $140 a barrel, further stoking inflationary pressures in the global economy. The spot price of Nymex West Texas Intermediate hit a record $130.30 a barrel on Wednesday. On Tuesday investors had rushed to buy oil futures contracts as far forward as December 2016, pushing their prices as high as $139.50 a barrel, up more than $9.50 on the day. Veteran traders said they had never seen such a jump and said investors were increasingly betting that oil production would soon peak because of geopolitical and geological constraints. Neil McMahon, of Sanford Bernstein, said: "Peak oil views – regardless of whether right or wrong – are seeping into the market and supporting high prices."
Credit crunch to stretch into 2009 Shares of large-cap U.S. banking stocks traded lower Tuesday after analysts at Oppenheimer & Co. said they see the turmoil in credit markets lingering at least into next year. "Our view is that the credit crisis will extend well into 2009 and perhaps beyond, and although the complexion will change, the net effect will be the same: three years of multibillion-dollar revenue reversals," the Oppenheimer analysts wrote in a note, led by Meredith Whitney. Whitney has built up credibility for her bearish and prescient calls on Citigroup Inc. and other Wall Street giants during the credit storm. Oppenheimer warns of billions of dollars of additional asset write-downs and loan-loss reserves as a result of underwriting excesses.
Central Banks are Free to Create as Much Inflation as They Want Over the past few months, we have heard numerous times in the media that the Federal Reserve and the other central banks have a choice between economic growth and rising prices (wrongly defined as inflation). In fact, most investors have been brainwashed into believing that the policies that stimulate strong economic growth automatically result in higher prices within the economy. For example, in our current situation, it is now widely believed that by slashing rates and adding liquidity to the financial system, the Federal Reserve is opting for strong economic growth in the United States. which in turn is causing the consumer price levels to rise. In other words, most people are being hoodwinked into believing that the prices are rising due to strong growth.
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