Pop now $978 - 983 +$16 + 1.66%. A good rise for the day and the market drops the share price. Just the wider market malaise hinting that the Trump bump maybe over or perhaps the dollar is falling back a touch. All good for Slp if this pattern continues. Commodity prices have remained subdued under a stronger dollar. We'll see in the days ahead.
The market is certainly a strange place and does not always follow logic. Both pop and gold up $12 and Wall St seems to be absorbing the rate rise without a blip. So who knows. I am as confused as you. AAL is back in profit and about to resume its dividend. A few months ago the picture painted looked different. Volatility in the extreme. Will have to wait for things to clear to see where the truth lies.
To illustrate better the Rand has been 15.88 to the dollar only 10 months ago but just yesterday it touched 12.83
In the same period platinum and gold have fallen around $70/oz and $90/oz respectively. Now this doesn't tell the full picture as other precious metals have risen like Iridium, Rhodium and Palladium but it does help illustrate my point.
Precious metals are nicely up today but need to move much higher to keep pace with the ZAR:USD trend.
SLP are still the safest precious metal play listed on LSE
GBP is not causing the South African mining sector woes, it is chiefly ZAR:USD which has investors concerned.
The issue of a weak pound is an interesting one and I believe will persist for the very reasons you've listed, but it's not what my point was about.
The reason why we are approaching bubble territory is not hidden in the ZAR:USD charts. Anybody who says the exchange has been higher is right but ignoring what is really happening. Metal price like we know are generally priced in USD and these are near record lows. The real issue is the reducing margins as a result of a strong Rand and persistently weak metal prices. Even after majors have cut back on high cost production. You can find recent articles quite easily which highlight a number of South African miners (gold and platinum) failing to break even at current levels. Difficult to see how the mining sector can dig it's way out of the current turmoil without further cutbacks and investment.
"My main worry is the loony policies of the ANC govt with president Zuma and ultra loony Julius Malema threatening to seize all white owned property without compensation. This will send SA down the Zimbabwe route. However I gather Zuma is not popular and the more moderate Democratic Alliance has won power in Jo'burg, Pretoria and Capetown. The ANC is losing it's grip and people hate the widespread unemployment and corruption that's endemic in the country. It's all a bit sad really but hope is still there that things will improve in time."
I agree and yet the Rand is nearing 2 year highs against an already very strong Dollar. I have seen nothing recently to support such Rand strength. The USD is expecting 3 rate rises like you say so one might expect the Rand to be weakening but it has surged.
I would never say the rand is in bubble territory as no one has confidence in the politics of South Africa, however it has improved against the pound chiefly over brexit worries along with the dollar and probably other currencies. Our own economy is hardly in great shape either with hight levels of debt and Scotland stirring the pot over the single market etc. My main worry is the loony policies of the ANC govt with president Zuma and ultra loony Julius Malema threatening to seize all white owned property without compensation. This will send SA down the Zimbabwe route. However I gather Zuma is not popular and the more moderate Democratic Alliance has won power in Jo'burg, Pretoria and Capetown. The ANC is losing it's grip and people hate the widespread unemployment and corruption that's endemic in the country. It's all a bit sad really but hope is still there that things will improve in time. Zuma has to quit in 2019 but who will the country get as a successor. Enough of African politics
As for Pop it is being governed by the prospect of rising US interest rates. The first 0.25% rise is due today. Rising rates normally depress commodity prices valued in dollars which explains the 10% fall from its highs. It should bounce back after a while. We'll see.
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