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FOMO — the fear of missing out — could come to dominate the gold market as an economic slowdown in the second half of the year triggers a selloff in the stock market and a move towards $3,000 an ounce in gold, said Bloomberg Intelligence.
"Central-bank accumulation and the potential for a global economic slowdown, on the back of the most aggressive rate-hike period ever, may set the stage for gold to move toward $3,000 an ounce," said Bloomberg Intelligence senior macro strategist Mike McGlone said in a report Tuesday.
One primary driver keeping the Federal Reserve hawkish is a strong stock market. This is what has been keeping gold from rallying, with U.S. Treasuries yielding about 5% and the S&P 500 up around 15% in 2023. But this performance will not last, according to McGlone.
"Bloomberg Economics' outlook for an ugly 2H may tilt the potential for a gold bull market toward a key catalyst — a stock bear market," he said. "If the 1H rising equity tide is sustained, the Fed is more likely to keep rates elevated. It's the potential for reciprocity to the biggest liquidity pump in history that's now dumping, and may draw parallels to 1929-30, when the Dow Jones Industrial Average initially fell about 50% and bounced about 50% before the Great Depression."
A big gold price supporter has been central bank gold buying, which has offset gold ETF outflows. And once the stock market begins to see significant losses, nothing will be holding gold back.
"Gold ETF holdings falling about 10% year over year to June 16 vs. the price rising around the same amount may suggest the metal is too hot, or has divergent strength," McGlone pointed out. "Our bias is the latter, as gold appears to be waiting on a Federal Reserve pivot and is being bought by some of the world's deepest pockets -- central banks."
McGlone added that the gains in the stock market are likely to be short-lived due to the coming deflationary recession. And this is good news for gold bulls who want to see gold trading sustainably above $2,000 an ounce.
"The metal's per-ounce price at about half the level of the S&P 500 in 2Q could be an advantage, particularly if the U.S. economy contracts," McGlone said. "The history of booms that go bust when excessive liquidity is removed might set the stage for gold to sustain above its $2,000 resistance."
https://www.kitco.com/news/2023-06-20/Will-FOMO-dominate-the-gold-market-This-sets-the-stage-for-3k-gold-price-Bloomberg-Intelligence.html
Wouldn't worry too much they are pricing this as though the mine isn't producing that much when quite the contrary is the case, any excuse to shuffle the shares , what we need is for that clear up to finish and then the AISC will fall off and assuming there re still real gold buyers then this SP should rise!
Absolutely T21a, the house always wins whichever way they decided to pull the levers!
Indeed these sudden unjustified moves (not only on POG) must be manipulation to catch stops in the virtual futures market......or to get some cheap gold miners stocks for trading by the hedge funds.
Price hopefully it eventually readjusts to the fundamentals, but short terms seem to be completely in the hands of the mafia. I wonder how do they do it...
Lucky,
What I have learned in 44 years working at brokerage houses and watching the markets is the 'Market' so to speak, needs little or no reason to move unexpectedly. Unfortunately it is silly buggers like us that either reaps the rewards or pays the piper.
Plenty of warnings on gold retreating and USD strength accounts for $10 drop. Centamin has delivered a double bottom. Now waiting to see if it holds or we get a lower low. I do feel Centamin is undervalued on forward earnings. Monsoon working slowly through India but the rainfall is around 8 days behind schedule. A future tail wind is two to three weeks away.
TheeUS market opened Lucky.
WTF what happened?
1970 to 1940ish in a couple of hours with no apparent reason?
I remember when I asked a DBA, if could guarantee the database change would work he said he couldn’t guarantee it - I then said would he be alive tomorrow ? (He was 35 years old and in good health)- he said he couldn’t guarantee it! So I asked him for probability on both and he replied 95% and 99.99999%- this then got me my decision making criteria clarification! The likelihood of these catastrophic events occurring and is predicting which ones, which order, when and impact etc is virtually nil- so why bother. Just detracts for sane trading…
Hi Farnky,
You raise some very valid points about the political and economic situation in Egypt, although I don't see much changing with next years election, I doubt the ordinary people have the stomach to go trough another revolution and will likely take the view of better the devil they know!
That said the situation is far worse and unstable in West African states which most likely is why Centamin pulled the plug after spendings hundred of millions on hole drilling!
In the past the Centamin management were less than truthful about the the potential future annual guidance and most importantly the inappropriate mining methods and corner cutting at Sukari to achieve short term gain and we share holders have been "Carpetbagged" and deceived by the senior management on so many occasions that trust has evaporated in the main.
The new CEO Martin Horgan can certainly talk the talk , but will he be able to deliver and that is the big question which is outstanding, until the AISC are reduced significantly and the underground is delivering on the alleged "Bonanza" grades the share price will remain at the bottom of the bargain bucket!
So why stay invested in Centamin, well the BOD and management are likely no worse , [possibly better than the management of the other miners who really care not a jot about anything else other than stuffing their pockets and boots with as much swag as possible !
In my experience the vast majority of listed companies are less than honest with shareholders and use corporate speak and slick PR agencies and corporate analysts to bullsh*t and baffle share holders to keep them dangling on he hook, but then that's life in general the ordinary decent people get shafted by the top table every time , you only have the look at the situation in the UK at present!
That seems very naive! You have a country in economic turmoil, terrible human rights that has seen the US pull funding an investment. A military run government oppressing the population and the war in Ukraine tipping swathes of folk into deep poverty. You think this is a stable country????!!!!! Glad you think so. You're invested in a old mine that is getting more and more expensive to operationally maintain, likely yielding less and less, in a country that is heading into an election next year with civil unrest. Um. good luck with that one.
"What a joke when others get longer sentences for far more menial offences!"
In wider crypto news, South Korean former crypto fugitive Do Kwon, who oversaw the collapse of Terraform Labs which was a catalyst of the two-trillion-dollar crypto market rout in 2022, has been sentenced to four months prison in Montenegro.
https://news.bitcoin.com/report-terraform-labs-co-founder-do-kwon-charged-by-montenegro-prosecutors/
n wider crypto news, South Korean former crypto fugitive Do Kwon, who oversaw the collapse of Terraform Labs which was a catalyst of the two-trillion-dollar crypto market rout in 2022, has been sentenced to four months prison in Montenegro.
Kwon was found guilty of forging official documents. He faces a litany of charges relating to the collapse of the TerraUSD stablecoin in his native country.
Whilst yet again the the "Banksters" get off with a piffling fine instead of jail for the perpetrators and having to pay compensation !
Regulators across Switzerland, the UK and US have completed their investigation into Credit Suisse’s handling of the Archeogos Capital affair, with new owner UBS potentially up for hundreds of millions of dollars in fines.
The FT notes that Britain’s Prudential Regulation Authority could impose a £100mln fine, while the US Federal Reserve could slap the bank with up to US$300mln (£235mln) in fines.
UBS is said to have set aside US$4bn from its war chest to deal with litigation against Credit Suisse.
https://www.proactiveinvestors.co.uk/companies/news/1018329/ftse-100-to-open-lower-ubs-stumps-up-massive-credit-suisse-fines-1018329.html
European stock indexes were lower ahead of the trading session on Tuesday as market participants assessed the German producer inflation report and prepared for the Eurozone construction output data. Yesterday, most European Central Bank policymakers backed another interest rate hike next month.
The DAX decreased by 0.19% at 8:01 am CET and the EURO STOXX 50 declined by 0.27% at 8:08 am CET.
The euro was flat compared to the dollar at 7:59 am CET, trading at 1.09246. The British pound was 0.09% lower than the American currency, going for 1.27805 at the same time.
Baha Breaking News (BBN) / MS
GS Retail, which operates convenience stores, confirmed on Friday that $19 million in gold bar sales were made there!
https://www.thenews.com.pk/latest/1081965-gold-bar-vending-machines-the-new-craze-in-south-korea
Https://twitter.com/respeculator
@respeculator 13.8K Followers
https://twitter.com/respeculator/status/1670587935182442500
original post
"Becoming more and more convinced $PRU.AX and $WAF.AX going to merge. Perseus probably has US$600m in cash at 30-Jun and a further US$300m debt facility and have pushed back their Sudanese project. WAF needs cash to build their project/s. Good West African marriage."
reply
https://twitter.com/dcb30a/status/1670603066553536514
"We were going for PRU & Centamin "
and a reply from respeculator
https://twitter.com/respeculator/status/1670604833496387585
"That makes sense too..."
------------------------------>>>>
It's June 19th and Centamin shareholders are still waiting for the Doropo PFS -
an interested 3rd party could be one reason for its long delay -
note: Perseus already has its Yaoure mine in Cote D'Ivoire
South Koreans can buy gold out of vending machines placed at convenience stores, and sales are surging, according to local media.
The buyers are embracing the easiness of buying gold bars at vending machines, citing value appreciation and inflation concerns, UPI News Korea.
In the nine months that ended in May, $19 million worth of gold bar sales were reported, said GS Retail, the company that operates the convenience stores.
The gold dispensing vending machines were introduced at five of their stores back in September. Since then, this was expanded to 29 stores, with plans to reach 50 by the end of this year. Overall, GS Retail oversees more than 10,000 convenience stores across South Korea.
The vending machines offer five weight options ranging between 0.13 and 1.3 ounces. The most popular gold bar has been the smallest one, which goes for around $225, the media report noted. The gold prices are updated daily, based on the international gold price.
"People in their 20s and 30s appear to be the main buyers, purchasing physical gold as an investment vehicle, especially in times such as these, when its value is continuing to rise," a GS Retail representative told UPI News Korea.
With inflationary pressures and the banking turmoil in the U.S. weighing on consumers, more people in Korea started stocking up on gold, said Inha University Professor Lee Eun-hee.
"But a gold bar purchased at a convenience store seems more like something done for fun than as a means for serious investment. I believe the popularity of these gold bars is mainly due to their easy accessibility, at convenience stores no less," she said.
South Korea is not the first country to introduce this type of shopping experience, with the UAE selling gold via the Gold To Go vending machine.
Despite the domestic popularity of gold, South Korea's central bank has embraced a more "cautious" approach to gold buying, preferring the liquidity of the U.S. dollars.
In a June report, the BOK said it maintains its U.S. dollar liquidity at times of high recession risks and geopolitical uncertainty, adding that it is still worried about the direction of gold prices.
"A cautious approach is necessary for determining whether to increase the ratio of gold in the foreign exchange reserves," the BOK said.
The central bank also noted that gold has already rallied quite a bit and could be close to peaking. More gold negatives were high interest rates and the difficulty of selling for liquidity purposes.
At the end of May, the central bank held 104.4 tons of gold in its foreign exchange reserves, worth around $4.8 billion and accounting for 1.14% of its total reserves.
https://www.kitco.com/news/2023-06-19/South-Korea-is-selling-gold-bars-in-vending-machines-and-sales-are-surging.html
Siko, Good to hear from you and like you I feel Egyptian politicians and their advisors see nationalisation as political/financial suicide. Egypt rely so much on the World Bank and International country finance and goodwill would go through the floor if they even hinted at the word.
They definitely need to do the opposite and encourage international investment especially if they are to develop their mineral resources.
Tell to the best of your knowledge do you feel the 5/6 influential Egyptian families still have advisory influence?
I remember in the early noughties senior family members of large Egyptian organisations were co-opted into the ministries to organise, restructure, streamline, manage and introduce efficiencies.
Sure he loves you, but he doesn’t like lies or manipulations
GLTA,
Dan
As a matter of interest I asked the company these questions on Tue, 31 Jul 2012 ,hope this helps!
As an investor in Centamin I wonder if you could explain the following questions if you are allowed or able and if not then let me know why?
1. There are rumours that gold mining may be nationalised in Egypt by the new government and I wonder if there is any truth in these rumours?
2. Is the recent strike at an end?
Answers-
Gold mining in Egypt is currently being carried out only by Centamin, though there is some exploration work being done by other companies. There have not been any announcements by EMRA, or indeed the Oil Ministry (under which the contract which Centamin has with the government sits under) and indeed the government is highly supportive of Centamin and plans to expand its production to in excess of 500,000 oz per annum. In view that Centamin is protected under the Oil Ministry, the same rules of tenure would apply to the oil companies (and there are a number of oil majors in Egypt), so any nationalisation would set a precedent that could significantly impact Egypt should it choose to go this route.
In terms of the strike, progress is being made but we will only announce when we are confident that all of the issues have been cleared up.
This is still work in progress.
Not sure if we have confirmed the bottom yet. USA shut this afternoon. If the low is not in, I expect it may happen in the coming 6-8 trading sessions. Possibly 92-93p double bottom. The alternative is the bottom was hit.
Major stock indexes in Europe traded lower in the premarket on Monday as investors continued to assess how the latest central bank monetary policy decisions will reflect on the economy. European Central Bank's officials shared that the chances of another interest rate hike in July are high. The Bank of England is next in line to make its move, which will be revealed this Thursday.
Meanwhile, this week will also be marked by a string of fresh data. On the agenda are German producer prices, the United Kingdom's consumer prices and retail sales, and both of the country's composite PMIs.
The DAX decreased 0.32% at 8:08 am CET, while the Euro Stoxx 50 fell 0.41% and the FTSE 100 declined 0.45% at the same time.
Both the euro and the pound traded flat against the dollar at 7:58 am CET, selling for 1.09408 and 1.28244 respectively.
Baha Breaking News (BBN) / AY
Happy Monday y’al
Remember Jesus loves you
Cowichan,
My point is that nationalization does not even get mentioned in Egypt now, despite all the financial troubles.. let me know if you find any recent article taking about it..
Those companies mentioned in the report, this was a tricky issue followed 2011 revolution, it was not initiated by the government.. just like Centamin court case..
As to the Suez Canal... Let's not even go there because I don't want to talk politics, history and occupation..
Loads of waffle ,history and your suppositions .
Everyone is getting used to it.
Take up politics in your country ,it will give you something to occupy your time. :-)
But to be honest, nobody knows what Egypt will do when they are faced with insolvency. Some articles from the past:
------------------------------------->>>>
https://egyptindependent.com/egypt-govt-bill-prepares-companies-for-re-nationalization/
Egypt Govt Bill Prepares Companies For Re-Nationalization
October 30, 2018
Companies that have handed down judicial rulings on their de-privatization include: Nile Cotton Ginning, Tanta Flax, Omar Effendi, Steam Boilers, Shebin El Koum Spinning and Weaving, Arab Foreign Trade, and Simo Paper.
Egypt’s Ministry of the Public Business Sector has prepared a draft law to eliminate the entanglements of companies returning to state ownership.
The law, consisting of only two articles, stipulates that re-nationalized companies should be referred to the Investment and Dispute Resolution Committee, to consider how to compensate investors who bought them in good faith.
story continues on link
---------------------->>>>
How Cairo Cracked Down On One Of Egypt’s Leading Businessmen -Inside the government and military’s squeeze on Safwan Thabet and his dairy company
Weeks before Thabet’s arrest, one of the senior officials tasked with overseeing new state-led milk production projects conducted several visits to one of Juhayna’s factories. During these visits, this official was allowed in on the how-to of managing the factory and the modernization of its equipment and operation systems, a second political source tells Mada Masr.
According to this source, Thabet appears to have been approached with a proposal to think about merging some of Juhayna’s factories with the new state-led initiative as a gesture of real support to food industries. Thabet treated this talk as mere chat rather than a request, the source says.
These visits coincided with Sisi’s repeated directives from last May and until early September to the prime minister, the agriculture minister and a number of other officials including Major General Mostafa Amin, the director of the Armed Forces National Service Products Organization, to establish a comprehensive integrated production and collection system all over the country. The plan included 200 milk collection centers.
Sisi drove these points home once again in remarks made just hours before Thabet’s arrest,
https://www.madamasr.com/en/2021/05/05/feature/politics/milking-juhayna-for-all-its-worth/
------------------------->>>>
these are not the actions of a free market supporting democratic regime, to say otherwise is only to falsely reassure Centamin investors all is well
and the granddaddy of all Egyptian nationalizations
On July 26, 1956, Egyptian President Gamal Abdel Nasser announced the nationalization of the Suez Canal Company, the joint British-French enterprise which had owned and operated the Suez Canal since its construction in 1869
https://history.state.gov/milestones/1953-1960/suez#:~:text=On%20July%2026%2C%2019