I think the market is starting to ignore the manipulation of paper gold and is investing in the producers, knowing full-well that future deliveries of physical gold will be at a premium to the current pricing of GLD (paper/digital gold).
dilobenj17...what I find encouraging in the commodity sector is that while prices of the underlying minerals/metals are still depressed, the stocks of iron ore, copper, uranium and gold/silver miners are beginning to move up...perhaps in anticipation of higher commodity prices going forward, or just because miners have been slashing the cost of doing business to the point where they're worth holding in a portfolio. I believe Peabody will eventually see a sustained uptrend...I just don't know from what level that will be.
bellard...they're probably just selling holdings in companies like UK Coal Production Ltd. and other British/Canadian/Australian coal/tar sands companies that are part of the British Royal Empire. They'll reinvest the funds into the UK fracking industry, which is also deplored by the British citizenry.
dilobenj17...explain the beat down of gold and silver yesterday relative to a flat U.S. dollar? Many commodities are still being blatantly manipulated, precious metals by Central Banks in defense of their fiat currencies. Every time the powers-that-be fear a precious metal breakout, there's a media blitz about potential rate hikes...as if people are going to sell their gold/silver holding to buy bonds yielding an extra .25%.
I'm not complaining, but somebody is buying on news that's not been disseminated yet. Of course, a 5% bump in today's natural gas pricing isn't hurting coal stocks.
The market is starting to ignore the Central Banks short selling of GLD (paper gold) and is recognizing the improved conditions of the gold mining industry, and their lower all-in costs of production.
The U.S. dollar continues to weaken today, down .36%, which may give gold a boost as the day progresses. The Central Banks keep trying to destroy the gold trade, using paper gold short selling, but it's not easy given the demand for the physical product.
Now they just took the GLD down $10 in a matter of seconds on no news...and the U.S. dollar is flat.
They come in every morning and try to crush paper gold (GLD), but the market is beginning to ignore it. There's global demand for physical gold...that's what going to move the miners going forward. And, Newmont had beautiful earnings this morning; they've brought down the cost of all-in mining for gold below $900.
If this were a tech stock, with a beautiful quarter like they've just reported, Newmont would be up 10-20% in the pre-market.
bargainmarvin...in the conference call, Peabody management stated that once natural gas prices move up, that coal use in the U.S. will regain a 40% utilization for electricity generation.
And, it's not easy to "collude and collaborate"...it takes a concerted effort by the players in power to make it happen. In the case of coal producers, I think it's going to first take the bankruptcy and liquidation of a few companies, coupled with some mergers of equals, to accommodate the backroom negotiations necessary to "collude and collaborate" on forward pricing.
history...some producers hedge, some don't...some producers hedge at the right time, some hedge at the wrong time...you never know who or how much until they've filed their financials.
nafta07...either the industry will collude and collaborate to bring down production, which is very difficult to prosecute against, or many players will be moved out, leaving a handful of "monopolistic" controllers of the U.S. natural gas industry. Either way, natural gas prices will not stay down from overproduction for much longer.
A few years back, the U.S. oil refinery industry must have basically agreed to stop undercutting each other on price, when it looked like they were all going belly up...now, even with low crude prices, profit margins at refiners are staying high, and most distillates have barely dropped in price relative to raw crude.
blackoutbuzz...if you believe in EIA data, then you should believe in the sustainability of global coal utilization. The EIA projects only incremental decreases of worldwide coal usage over the intermediate to longer term.
blackoutbuzz...if natural gas producers are making money above $2 (wherever the shale property is located), then the U.S. natural gas industry would not be lying on it's back right now, and Wall Street wouldn't be worried about massive debt default(s). So, in short, I don't believe the hype about low breakeven points being disseminated by the financial media...nor do I believe that production efficiency technology has magically scaled up output in the past 6-months.
blackoutbuzz...natural gas prices NEED to go up or major companies, with distressed bonds, will go under...igniting yet another financial crisis, which the government and Wall Street are not positioned to handle.
The natural gas and oil rig count has dropped 19 weeks in a row, and will probably continue to do so until prices move up. Unsustainable high prices of any product, where demand is diminished, normally leads to lower prices, while unsustainable low prices, with below cost of production pricing, leads to higher prices...that's the way it's always worked.
You obviously didn't listen to the conference call. The only caveat, the possible negative going forward, is that the rebound in U.S. coal pricing and utilization will rely on higher natural gas pricing. Most experts believe that U.S. natural gas prices are going to head back up in the near to intermediate term.
If you have a chance to listen to the call, which should be available soon on the Peabody website, it's worth the time.
datagrinder...from my understanding, just because a company files for Chapter 7 (assets are liquidated and converted to cash) or Chapter 11 (where reorganization is the goal) bankruptcy, and hopes to re-emerge and start anew, without the encumbrance of debt, it's not a given right. You still have to have somebody who's willing to invest in the new entity, after creditors are satisfied. Lots of companies declare bankruptcy and just disappear. Bankruptcy laws vary from State-to-State, there's no exact formula for determining the outcome...but, I think coal miners, given the present political climate, will find their assets more likely auctioned off to the highest bidder to pay off creditors. JMHO.