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Kando,
Your analysis is broadly correct, but it is not just the Fed that is clinging to a false analysis the market has a whole is doing so. The consensus Wall Street forecast for inflation averages around 2 per cent although today`s inflation figures have hit 9 per cent. They too have to believe it is transitory caused by temporary supply constraints otherwise their forecasting models break down with dreadful consequences for asset price forecasts and in their own remuneration. Any meaningful tightening with have a long time scale before it takes effect. and therefore in my humble opinion high inflation will persist for some while. The consensus scenario also requires the gold price to remain suppressed so that it goes not give a signal that serious levels of inflation are on the way.
I came out of AAZ on a profit and reluctantly out of Rainbow Rare also on profits to add on Centamin today as an average down. On those I came out of I would be down with no profits at all if I stayed in, so I am hoping it turns out okay. Centamin price is dependent on what happens to gold. I calculated if on that Sprott interview assessment of $2100 gold area arises then Centamin would recover to 112p area by March 2022. I would be hugely happy if that scenario arose. I would be ecstatic if it went higher.
Put your money below the floorboards then take it back out in a year's time it'll be worth half it's current value instead of 25%..
Massive yield, but is this a danger sign or has the market got this one wrong
Just for the record for better or for worse finally made an initial buy this avo around the 82.5 level.
I'm sure it could well be for richer or poorer too :o
Every high inflation reading elicits a drop in gold because the blind faith in the Fed is still resolute, but it won't last forever. Ackerman, whatever his motives, is right: they are asleep at the wheel. But it's not out of incompetence or negligence, they've no real choice but to keep dishing out the Nytol. They simply don't have the room to aggressively reign in QE or to raise rates. It'll only be in hindsight that the broader market says, well, our trust in the Fed to control inflation was misplaced, because they never really intended to control it in earnest. They intend to prop up asset prices, support the labour market and to allow inflation to rapidly erode dangerous levels of debt. It's the least worst option for them. They will talk tough on inflation in as much as the hawkish words themselves will have some dampening effect on its growth, but they will not materially act. Inflation readings in the US will hit 10% before the Fed gets round to its first 0.25% hike.
https://www.thetechnicaltraders.com/2022-precious-metals-forecast-video/ Courtesy of Svend on Polymetal board.
I checked what was said about the pennant formation on momthly charts which is also true on weekly charts. This coincides to a major break in gold in Q1 2022. At the very least it gives us hope in the darkest hours.
Omicron is concerning the FED. Likely to stay with the usual taper and see how it goes. Whatever the FED does it won't change the inflation outlook as more companies re-shore to USA production from the far east. Adding to company costs further with interest rate hikes actually makes the inflation worse and goes against COP26 initiatives. USA will also need more people to work in manufacturing and wages in that sector likely to go up and they usually vote democrat.
Games, games , games. The value of FIAT currencies is cratering and they are trying to suppress PMs, the traditional hedge. This cannot go on forever.
Temporary blip.. painful but it'll pass eventually
Ooops meant Gekko …
Af thd moment CEY. Get dragged down when gold drops znd struggles to hold its own when it rises . Not sure what's going on here
Gecko lol
....and Gold tanks...
Inflation genie well and truly out of the bottle and Fed won't be able to reign it in any time soon.
My mind is very active today considering various options designed to create maximum share holder value from here at lowest risk .
Using previous example Centamin could dispose of West Africa assets for the £ 300 million mentioned by Goldgnome
These proceeds combined with current cash would total £500 million , which could be used to buy back shares .
Wind down remaining Sukari asset, no further exploration , sell new exploration rights if possible and buy back more shares .
Manage Sukari for cash and distribute proceeds back to remaining shareholders ..same dividend amounts but fewer shareholders receiving them so DPS will be higher
Once depletion of existing reserves has been reached , sell off the remaining footprint with assets and switch the lights off at Centamin !
I am expecting outrage at that suggestion , but that might generate more wealth for us all than the current management are creating now and possibly will in the future ?
Guess where my bonus is going next week..
This is why I don’t trade on charts, RSI etc… just on data points …
Its so bombed out that I can not recall it being this low.
Yep and gold drops…
FED this week is key… interesting times…
Gold price just puked..
Taken from CNBC breaking news.
Wholesale prices increased at their quickest pace ever in November in the latest sign that the inflation pressures bedeviling the economy are still present, the Labor Department reported Tuesday.
The producer price index for final demand products increased 9.6% over the previous 12 months after rising another 0.8% in November. Economists had been looking for an annual gain of 9.2%, according to FactSet.
Wholesale prices measure rises 9.6% in November from a year ago, the fastest pace on record.
I know that I simplified the equation and that future returns must be discounted for risk , but I think there are more cash generating opportunities that i havent listed here .
What swampmonster is saying is correct , but Sukari has now been well prepared for future production , thanks to the underpinning work , so I can't help thinking that the disposal proceeds from Sukari alone will be significantly higher than the current market value of Centamin as a whole
I agree though , who would take that risk in the current environment , and in the end , the asset is only worth what somebody is prepared to pay for it
What is the lowest offer people on this board would be happy with?
Personally, I would be happy if I got £1.40. I would vote YES.