Market Update

General - save the date: 24.2.2017 Resources Conference Zurich

Good afternoon

watching the press conference yesterday, I was really dismayed and horrified by the man, who will be running the economic and military powerhouse of the world soon! I deeply regret the moderating words I ahve been writing here recently...this guy is pain for anybody halfway sensible! 

In a business sense, the press conference has been very disappointing as well. Investors had hoped for some clues as to what he wants to do to re-vitalise the US-economy...nothing has been said of any substance.

As a consequence, the US$ is trading sharply lower, and gold has cleared 1200 US$/oz this morning in Europe. metals are strong as well - except for nickel. Indonesia will allow a limited amount of nickel ore exports - how much this will be, and how it excatly works needs to be clarified. but for now, nickel is unchanged, while everything else is up 2%+. Same for iron ore and steel rebar in China - both are up again, and are approaching levels last seen at the time of speculative exhuberance 2 month ago! RIo and BHP are poweing ahead in London.

Uranium stocks also continued their run, while Macquarie is warning, that the 2000t production cut by Kazachstan still leaves a substantial supply overhang.

German GDP grew by a slightly better than expected 1.9% last year, driven by construction, private-and government consumption. Public accounts aggregated ( gover-budget, state budgets, social insurance ) have a 19 bill Euro surplus for 2016. Germany continues to be very healthy and is profiting from the weak Euro - and should easily be capable of looking after a few hundred thousand refugees properly! Let´s hope, that Trump does not choke off our car industry!! I think he might not - we would in turn properly tax his technology firms, for a change!!

Freeport got their export clearance for copper ore from Indonesia...while Escondida wages talks are still hanging over the market. Some commentators see the risk of some disruption at the world´s largest copper mine.

Gold stocks in the US last night, as well as in Australia early this morning, saw some small profit-taking - to me it looks like most would not ahve expected the gold price to break 1200 in the first attempt, as happened in London today. I think we should see some nice catch-up tonight. I bought some Evolution early today....

All coal stocks have been under pressure lately, following on from the unseen run until late Nov last year. Let´s face it - coking coal at 185 US$ ( the current spot ) anmd 82$ for thermal coal are great for all halfway reasonable producers and would-be producers. I would not be surprised, if we would stabilize soon at current levels.

Citigroup - to my knowledge and alongside Macquarie the most respected analyst team for commodities - believes further momentum in commodity prices to take prices higher in 2017 and 2018. This is driven by limited supply growth, and solid GDP-growth around the world, especially China. The analysts believe, that the positive enviroment will also lead to more financial investment in commodity funds, driving prices further. 

Have a nice evening