Monsters of Rock: It’s not a good day to be a gold bull
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There’s a committed network of gold bulls from prospectors to fund managers ready to chew your ear off about gold price discovery.
It all comes back to the central point that we don’t know exactly what causes commodities to swing so wildly, although you can take educated guesses.
$4B in notional gold contracts for sale on a Sunday night is not a market, it is a currency intervention.
Most private traders would lose their clients and/or their jobs for executing an order in such a fashion.
So the questions are “Why?” & “Why now”?
— Luke Gromen (@LukeGromen) August 9, 2021
Whatever the rationale it was a bad day for Aussie gold miners, who have already suffered equity hits over the past 12 months, much to the chagrin of their stupefied bosses.
Northern Star Resources (ASX:NST) lost more than 4.5% and AngloGold Ashanti (ASX:AGG) was down ~8.5%, with Newcrest (ASX:NCM), Regis Resources (ASX:RRL) and Evolution Mining (ASX:EVN) also deep in the red.
Iron ore moderated after its big slide on Friday, but iron ore derivatives traded on the Singapore and Dalian exchanges were down after weak Chinese trade figures over the weekend, so the price will be watched closely overnight.
Lithium juniors were super charged this morning as that market goes gangbusters.
In the mid and large caps it was a rare earths company that took the proverbial cake, with Australian Strategic Materials up over 3%.
ASM secured a US$250 million investment from a consortium from South Korea back in July for a 20% interest in its Dubbo project and a 10 year offtake agreement for 2800tpa of neodymium-iron-boron alloy from its metals plant in Ochang.
Iron ore prices may be on the slide, but thermal and coking coal continue to perform well as output from Australia finds alternative markets despite a ban on our coal by China.
Thermal coal prices in particular have defied negativity about their future as renewable energy displaces fossil fuel generation to rise to decade high prices.
Yancoal owns the Moolarben, Hunter Valley, Ashton, Austar and Donaldson mines in New South Wales, Yarrabee and Middlemount JV in Queensand and manages the Cameby Downs and Premier mines in Queensland and WA on behalf of Yanzhou.
Yancoal’s average realised prices rose from $88/t in the first quarter of 2021 to $101/t in the June Quarter.