Gold Outlook: Will Gold Bounce Back in 2014?
Let’s take a look at what some of the experts are saying could happen to gold in 2014.
The day after the Fed’s decision to curb QE, the Financial Post quoted Canaccord Genuity’s Martin Roberge as pointing to the fact that this year is the first year since 1997 that gold will finish with a double-digit drop. Roberge noted that in other years where gold fell at least 10 percent, gold was flat the following year. “Very importantly, negative momentum should carry through the first half,” Roberge said in a note mentioned by FP.
UBS Investment Research
UBS Investment Resarch said earlier this month that with few positive catalysts moving forward, “gold is unlikely to regain its former appeal”. Accordingly, the firm cut its 2014 average gold price from $1,325 an ounce to $1,200. “As 2013 comes to a close, the New Year will likely tempt investors to further move out of safe havens — and especially out of gold — into other assets. Gold has become old news, and investors are likely to be eagerly searching for new places to put their cash to work,” said the UBS analysts.
Bank of America
The Bank of America was a little kinder to gold, predicting on December 15 that gold in 2014 will average $1,294 an ounce, rising from $1,250 in the first quarter to $1,350 in the fourth. The bank, however, warned that further slides could occur if the U.S. central bank tightens monetary policy by raising interest rates — a factor that could push gold down to $1,100.
Morgan Stanley in October predicted that gold will extend losses in 2014 amid expectations of a further paring of U.S. stimulus — a prediction that proved prescient considering the $10 billion cut to QE announced on December 18. The investment bank said bullion will average $1,313 an ounce next year, compared to its 2013 forecast of $1,420, Morgan said in its quarterly metals report quoted by Bloomberg.
Following bearish gold calls in October, Goldman Sachs said today, December 19, that gold’s declines aren’t over. “Gold is now likely to grind lower throughout 2014,” Jeffrey Currie, Goldman’s head of commodities research in New York, told Bloomberg. “Much of the expected price decline has been priced in as opposed to a more gentle process as the Fed backs away from QE. When the gold market sees these events, it usually tries to price it in immediately.”
The most bearish of the bunch, the investment bank said on November 20 that gold will drop to $1,050 by the end of next year.
Ending on a more upbeat note, Australian Mining wrote in a December article that even though gold company revenues are predicted to shrink next year by 10.2 percent, due to the combination of a lower gold price and higher production costs, the future for gold in the short term is positive.
The publication quoted Owen Hegarty, a former Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) executive, as saying that Chinese demand for gold is “unstoppable” and that “Australia will be playing catch up to deal with a supply problem for years to come, as big miners continue to shelve projects.”
“Supply is going to continue to be the issue, we are going to be playing catch up football on the supply side,” Hegarty told the recent Gold Symposium forum in Sydney.
Gold Outlook: Will Gold Bounce Back in 2014?
Will gold’s #$%$ horribilis turn into an #$%$ mirabilis (wonderful year?) in 2014? The indications aren’t promising, considering the number of negative factors pushing against it, as outlined above.
For instance, while the U.S. government recently passed the Volcker rule designed to curb banks’ participation in high-risk strategies such as investing in hedge funds and trading gold and silver, the banks are already ”seeking exemptions, loopholes and new ways to interpret the rule” instead of figuring out how to comply with it, according to a recent Forbes articles quoted by Silver Investing News. That means gold investors will likely continue to see gold and silver prices manipulated next year as they rise and fall with each mention of another pullback, or continuation, of QE.
On a more positive note, the Economic Times reported that gold buyers in India may soon have reason to cheer, considering that the government may ease import restrictions “following a dramatic improvement in the [current account deficit] and an unintended consequence of the curbs — a rise in smuggling”. A reduction in gold import duties from the current 10 percent could spur increased physical gold demand in India next year which could bid up the price.
An interesting trend that hasn’t been covered in the mainstream financial press is one identified by Jeff Clark, senior precious metals analyst at Casey Research. While the World Gold Council noted that total gold supply — mined and recycled — fell three percent in the third quarter compared with the same period a year ago, Clark is predicting a more serious supply crunch in 2014. That would bode well for the gold price, even if demand factors continue to flounder. According to Clark, the four factors that could chip away at the gold supply are: lower production, delayed mine development, and cuts to exploration budgets; “high-grading” deposits; governments putting a stop to big mining projects; and the implosion
Copper Rises as Growth Outlook Fuels Closing of Bets on Decline
By Agnieszka Troszkiewicz Dec 20, 2013 5:28 AM CT
Copper rose in London, narrowing a weekly drop, as traders bought metal to close out bets on lower prices amid prospects for a stronger world economy.
Global growth is poised to accelerate to 2.8 percent next year, according to economists surveyed by Bloomberg. A gauge of U.S. leading economic indicators increased more than forecast in November, data showed yesterday. The Federal Reserve said this week it will slow monthly debt-buying further if the economy improves as forecast.
“The speculative part of the market is mostly short base, so short-covering has been driving prices higher,” Jesper Dannesboe, a senior commodity strategist at Societe Generale SA in London, said by e-mail today. “Increasing optimism on global growth for next year, led by the U.S.,” helped to stoke purchases, he said.
Copper for delivery in three months gained 0.6 percent to $7,245 a metric ton by 11:25 a.m. on the London Metal Exchange, cutting this week’s slide to 0.1 percent. Prices retreated 8.6 percent this year. Copper for delivery in March rose 0.5 percent to $3.311 a pound on the Comex in New York.
The Fed will probably reduce its bond purchases in $10 billion increments over the next seven policy meetings before ending the program in December 2014, economists in a Bloomberg survey said. The central bank unveiled a $10 billion reduction to $75 billion on Dec. 18.
Copper stockpiles monitored by the LME, at the lowest since February, fell for a 35th session to 382,550 tons, daily data showed. Orders to withdraw the metal from warehouses dropped to 253,075 tons, down 33 percent from the 2013 high in June.
The central bank in China, the biggest copper consumer, conducted short-term liquidity operations recently, it said on its microblog yesterday, without giving det
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I looked at TNK but bought 66500 shares of DRYS because they own ORIG in the shipping sector between $2.76-$3.18. I will hold for 2 years
Merry Christmas to you too. I did the same thing with AKS early this year .I bought 125,000 shares of AKS between $2.81-$4.01 and still hold it till now it is above $7.00
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Outlook 2014: US To Be World Economy's Engine, Gold in Triple Digits? - EDC Comments
Dec 17, 2013
Guest(s): Peter Hall Chief Economist & Vice President - EDC
Kitco News brings back EDC’s Chief Economist Peter Hall to get his outlook on the global economy as well as gold and other commodities. Last time Hall was on Kitco News, he said gold below $1,000 was a possibility. “We really haven’t seen fit to change our outlook [on gold] at all,” Hall says. “Our stance was confirmed by the reaction of the global markets to the mention of tapering by the Federal Reserve Board
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Global copper inventories near the end of 2013 are slightly below the end of 2012, Hicks pointed out.
“That’s in part why we’re seeing copper prices at fairly strong levels,” Hicks said. Comex March copper hit a six-week high in the second week of December, when Hicks spoke. “I think we’re continuing to see constraints with respect to processing. We still have a very strong physical market. It looks like copper is starting to move into backwardation as well.”
Backwardation is when nearby prices are higher than those for deferred months, meaning buyers are willing to pay extra to get metal right away.
“So we’re seeing some strong demand here recently,” Hicks continued. “I think if we do get a global synchronized growth pattern in 2014, copper prices could strengthen even further on better-than-expected demand.”
Positive demand sources, Hicks said, include improving auto sales in much of the world and continuing efforts by key copper consumer China to develop its power grid.
Copper Supplies Also Seen Higher
Copper output rose in 2013 and is expected to do so again next year, observers said.
For instance, Meir sees mine output up to 18.5 million tons in 2014 from 17.9 million. Refined production is seen up to 21.75 million from 21 million.
CPM Group calls for 2014 mine production of 18.86 million tons that would be up from 17.35 million this year. Refined output is forecast at 22.21 million, up from 21.1 million this year.
Some of gains were the result of projects started a few years ago when copper was soaring. The price more tripled to $8,940 a ton in the middle of 2008 from less than $2,000 at the start of the millennium. Prices fell back as far as $2,187.25 when the recession hit Western nations, but bounced back to a record of $10,190 in early 2011 with the help of strong Chinese demand, before falling back again.
“You have a lot of projects that were started in the boom years in 2007, 2008 and 2009 that are just coming on stream now
Copper Seen As 'Not Too Hot And Not Too Cold' In 2014
Editor’s Note: Check out Kitco’s full 2014 coverage.
(Kitco News) - Base-metals analysts are describing a Goldilocks scenario for copper in 2014 – not too hot and not too cold.
Photo by Jonathan Zander
Production is expected to increase, but leave the market in only a modest supply surplus with demand that most analysts forecast to hold up although not be spectacular. Against this backdrop, most said they look for copper to remain largely range-bound in 2014.
“I’m not super bearish. I’m not super bullish either,” said Leon Westgate, commodity strategist at Standard Bank, in an interview with Kitco News.
Bank of America Merrill Lynch, in its 2014 commodities outlook, said it was “neutral” on copper. This bank said it sees supplies growing, but global demand excluding No. 1 consumer China will offset some of an expected growth slowdown in China itself.
“As such, we believe copper is not too hot and not too cold, i.e. next year’s average may be close to quotations seen this year,” said BofA Merrill Lynch.
Edward Meir, commodities consultant with INTL FCStone, described a picture in which copper demand will grow but may be subpar or mediocre. Meanwhile, he said, supplies are “catching up” after the deficits of past years. Against this backdrop, he said he looks for copper on the London Metal Exchange to range mostly between $6,500 and $7,900 a metric ton.
Brian Hicks, co-manager of U.S. Global Investors’ Global Resources Fund (PSPFX), suggested the red metal could spend much of the year hovering around $3.20 to $3.30 a pound.
Three-month copper closed on the LME on Dec. 16 at $7,290 per metric ton. The most-active March futures finished at $3.3295 per pound on the Comex division of the New York Mercantile Exchange.
For 2014, Westgate listed an average price forecast of $7,200 a ton, as did INTL FCStone. TD Securities forecast $7,093, and BofA M
IKjdil029, another stock you might look at and do more homework is ACI arch coal .I am looking at it right now and doing my DD. It reminds me of AKS last year. every one hate ACI. They have about $1.5 billion in cash and coal will come back .We need coal in this country and the world. it has a support around 4.03 keep watching that support if goes below that just wait till the stock find another support in the middle of $3.00 .Good luck to you.
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I am asking my self these questions.
Sierra Gorda molybdenum glut to hamper price rises - analyst
By Samuel Williams - Friday, December 13, 2013
Molybdenum prices are likely to remain subdued in the coming years because of a "glut" of new production, Haywood Securities analyst Stefan Ioannou told BNamericas.
Poland-based KGHM Polska Miedz' Sierra Gorda copper-molybdenum project in Chile's northern region II alone is expected to generate roughly 50Mlb/y of molybdenum over its first three years of production, equivalent to about 10% of global annual demand of 500Mlb/y.
This is double the expected annual growth in global demand of about 5% or 25Mlb/y in the coming years, Ioannou said.
The start of production at Sierra Gorda, expected in 2014, coupled with the restart of production of a number of other major molybdenum producing mines, such as Freeport McMoRan's (NYSE: FCX) Climax mine in the US, is "going to flip the market," which is currently about in balance, he added.
On the demand side, "question marks" remain over growth from China, a major consumer of molybdenum in production of high strength steel, Ioannou said.
"It's going to take another couple of years to work through that glut of supply, and for demand to catch up with supply," he added.
Haywood expects molybdenum to average US$10/lb in 2014, with 2013 figures likely to come in a bit under the company's US$10.25/lb guidance.
Long term prices are expected to improve to US$12/oz, Ioannou said.
Molybdenum closed at US$9.888/lb on the London Metal Exchange on Friday (Dec 13), unchanged on the previous day.
Thompson Creek May Close Mines If Moly Price Falls More
By Gerrit De Vynck Dec 9, 2013 3:22 PM CT
Thompson Creek Metals Co. may suspend production at its two molybdenum mines if the price of the steel-strengthening ingredient falls further.
Should prices of molybdenum oxide, a commonly traded form of the metal, drop to $9 or $9.50 a pound, the Littleton, Colorado-based company would consider closing the mines, Chief Executive Officer Jacques Perron said in an interview at Bloomberg’s Toronto office.
“We’ll continue to do our best to reduce costs and have very efficient operations,” he said. “But if the price goes to $9 a pound it’s going to be very difficult for us.”
Molybdenum has fallen 18 percent this year to $9.57, according to data compiled by Metal Bulletin. The metal also increases steel’s resistance to heat.
“It’s typical of these types of operations, you put them on care and maintenance and you wait for better days and when the price goes to $13 or $14 you restart them,” the CEO said.
Thompson Creek needs cash to pay back debt it took on when it diversified into copper and gold by buying the Mt. Milligan project in British Columbia. The first payment of $350 million is due in December 2017, Perron said. The company had long-term debt of $911 million at the end of the third quarter, according to a filing.
Although earnings for this quarter will be “horrible,” the new Mt. Milligan project will start to be profitable by the second half of 2014, Perron said in the interview on Dec. 6.
The shares fell 9.7 percent to $2.33 in New York on Dec. 4 after a report from Toronto-Dominion Bank that the miner may not have enough money to pay bondholders when its first payment is due. The shares closed unchange
Hi pricetovaluebuyer ,this is page 59 of 112 please explaine
what do mean
Significant components of the Company’s deferred tax assets and liabilities at December 31, 2012 and 2011 are as follows:
Deferred tax assets: Net operating loss and tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 625.0 $ 492.4 Postretirement benefits ................................................................ 231.6 275.7 Pension benefits ..................................................................... 374.0 376.8 Inventories ......................................................................... 116.7 118.6 Other assets ........................................................................ 94.4 95.5 Valuation allowance .................................................................. (873.1) (22.3)
Total deferred tax assets ............................................................. 568.6 1,336.7
Deferred tax liabilities: Depreciable assets ................................................................... (357.7) (390.9) Other liabilities ...................................................................... (49.5) (12.8)
Total deferred tax liabilities .......................................................... (407.2) (403.7)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 161.4 $ 933.0
Deferred taxes include the income tax effect of temporary differences between financial reporting and tax reporting. Temporary differences represent the cumulative taxable or deductible amounts recorded in the consolidated financial statements in different years than recognized in the tax returns. Net operating losses and tax credit carryforwards may be used to offset future taxable income, and their benefit is reflected in the deferred tax assets. The postretirement benefit difference includes amounts expensed in th
China Rongsheng ghost town reflects shipbuilder's struggle to survive Monday, 09 December 2013 | 00:00
Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area's reliance on China Rongsheng Heavy Industries Group, the country's biggest private shipbuilder.
Like Rongsheng's shipyards, the area is struggling to survive.
The shipbuilder this week predicted a substantial annual loss, just months after appealing to the government for financial help as it reeled from industry overcapacity and shrinking orders. Rongsheng lost an annual record 572.6 million yuan ($92 million) last year, and lost 1.3 billion yuan in the first half of this year.
The company has become a test of China's market reforms.
While Beijing seems intent to promote a shift away from an investment-heavy model, with companies reliant on government cash injections, some analysts say Rongsheng is too big for China to let fail.
As ship orders and funding have dried up, the firm has delayed deliveries and now faces legal disputes, shipping and legal sources said. The company - whose market value has slumped more than 90 percent to around $1 billion since its Hong Kong listing in late 2010 - is in talks with bankers to restructure its debt.
Local media reported in July that Rongsheng had laid off as many as 8,000 workers as demand slowed. Three years ago, the company had about 20,000 staff and contract employees. This week, the shipbuilder said an unspecified number of workers had been made redundant this year.
The local community, on the outskirts of the eastern Chinese city of Nantong, has mirrored Rongsheng's fall.
A purpose-built town near the shipyard's main gate, with thousands of flats, supermarkets and restaurants, is largely deserted. Nine of every 10 shops are boarded up; the police station and hospital are locked.
"In this area we're only really selling to workers from the shipyard. If they're not here who do we sell t
Thompson Creek faces solvency issue – TD
Jonathan Ratner | 04/12/13 | Last Updated: 04/12/13 11:25 AM ET
More from Jonathan Ratner | @fpinvesting
Casper Hedberg/BloombergTD Securities analyst Daniel Earle pointed to Thompson Creek's highly leveraged balance sheet and its unsustainable molybdenum operations at current metal prices in support of his bearish outlook on the stock.
Thompson Creek Metals Co. Inc. appears to be running out of cash, Daniel Earle at TD Securities warned in a report Wednesday.
The analyst said the miner’s molybdenum operations are unsustainable at current metal prices, and noted that its Mt. Milligan project in central British Columbia is a very low-grade mine.
Mr. Earle also pointed out Thompson Creek’s balance sheet is highly leveraged and all six of the comparable ramp ups of large milling operations in North America significantly underperformed.
“Whatever the ramp up, we believe that the company’s long-term solvency is a major issue,” the analyst told clients. “With a ‘bad’ ramp up and even lower metal prices, we could see the company pressured to refinance next year.”
His forecasts suggest Thompson Creek will not be able to generate enough cash to repay approximately US$1-billion in debt maturing between 2017 and 2019, assuming prices of US$1,300 per ounce for gold and US$3 per pound for copper.
Mr. Earle met with Thompson Creek’s newly appointed chief executive, Jacques Perron, on Dec. 2. These discussions left the analyst confident that the company has several options for resolving its debt obligations that could avoid a significant dilutive equity financing, including a refinancing of its outstanding debt and/or a renegotiation of gold-streaming deals with Royal Gold Inc.
However, Mr. Earle does not expect Thompson Creek to fully evaluate these options until the ramp up at Mt. Milligan is complete and it has made a decision on the long-term viability