Editor's Note
July 2014

Despite the old adage that one should ‘go away in May’ and sit out the summer, miners enjoyed one of their best months in June. Double-digit returns were the order of the day for many mining related indices with many pundits re-emphasizing that we have seen the bottom and we should look forward to a gradual strengthening through the rest of the year.

Much of the headlines have been grabbed by gold but also silver – whilst gold made a solid break through the $1,300 barrier, silver has also managed to hold its head above the $20 mark. True we have been here before and there are plenty of voices warning of a correction downwards, non more so than the titans of Wall Street who continue to re-iterate their bearish sentiment.

Whilst precious metals have enjoyed a stellar quarter, the industrials have been a mixed bag with iron ore descending through the $100 mark on concerns that China will not be the market that everyone expects to be. But whilst China is the focus for iron ore watchers, other industrials such as copper and nickel continue to enjoy a rebound in 2014. Copper, driven by growing evidence that the world is indeed growing, has recovered much of the ground that it lost at the end of the first quarter. As for nickel, Indonesia’s continued ban on unprocessed exports has made it the best performer so far this year.

Despite the limited exposure that miners get on the financial world stage, certainly when compared with their petroleum cousins, these price rises are generating news print which translates to greater awareness. Whilst nobody can forget what a horrible year 2013 was for the price of gold, much is being written about this year’s rebound which is increasingly focusing investment attention back on the metal can only have a compounding effect.

News from around the world is that whilst we are not back to the frothy days of 2010/2011, confidence is returning. Reports of huge amounts of capital being readied have been around for some time, but now some of the first deals are starting to be done. The question is how long will it take to reach ‘break out’ velocity. Not many foresee it happening over the summer, but watch this space…


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