Is It the End of the World As We Know It?
Oh, how the squawking has started. In the last two days, silver skidded lower, gold looks even worse, and oil is leading the way down. It didn't take long for the bears to come out growling that the commodity boom is over. "It's the end of the world!" they cry.
Here at Castle Discordia, we take a more sanguine view. The markets were frothy. Some money is coming out. So, we'll bandage our burned fingers and wait for the (very) likely bounce.
Don't believe me? Listen to Owen Hegarty, Managing Director of Oxiana, an Australia-based copper-gold-zinc miner. I have put some select passages in bold...
"We're seeing higher export volumes out of Australia andalso out of our Asian operations. Higher volumes and also higher prices, that's a double impact in terms of revenue," Owen told Bloomberg News.
"China is driving trade and investment for our products in Australia and in Asia. We're expanding our business at operations here in Australia and in Laos.
"We see prices remaining quite firm, quite solid. There's good strong demand around the region and there's subdued supply, so only one thing can happen to prices: they'll stay strong.
"There's good worldwide demand, fueled largely by China. You haven't seen supply being able to catch up.
On the outlook for commodity demand: "We haven't seen any slowing in demand from China, you just can't see the end of the freeways and the power lines and infrastructure that is being built up there, certainly in western China. So the demand for energy, for copper materials, for steel and zinc and all of those commodities that we produce here, looks like being strong and long.
"We are in a period of worldwide economic expansion thatthe Western world hasn't experienced before. It's inevitable that you'll have this continued growth in China, India and other parts of the world.''
Well, I don't know about you, but Owen's outlook sounds bullish to me. If he's right -- and I believe he is, this is just a "hot-money" correction, and we should see excellent buying opportunities on the other side. I won't try to predict exactly when that will be, but probably not too long.
Here at Castle Discordia, we take a more sanguine view. The markets were frothy. Some money is coming out. So, we'll bandage our burned fingers and wait for the (very) likely bounce.
Don't believe me? Listen to Owen Hegarty, Managing Director of Oxiana, an Australia-based copper-gold-zinc miner. I have put some select passages in bold...
"We're seeing higher export volumes out of Australia andalso out of our Asian operations. Higher volumes and also higher prices, that's a double impact in terms of revenue," Owen told Bloomberg News.
"China is driving trade and investment for our products in Australia and in Asia. We're expanding our business at operations here in Australia and in Laos.
"We see prices remaining quite firm, quite solid. There's good strong demand around the region and there's subdued supply, so only one thing can happen to prices: they'll stay strong.
"There's good worldwide demand, fueled largely by China. You haven't seen supply being able to catch up.
On the outlook for commodity demand: "We haven't seen any slowing in demand from China, you just can't see the end of the freeways and the power lines and infrastructure that is being built up there, certainly in western China. So the demand for energy, for copper materials, for steel and zinc and all of those commodities that we produce here, looks like being strong and long.
"We are in a period of worldwide economic expansion thatthe Western world hasn't experienced before. It's inevitable that you'll have this continued growth in China, India and other parts of the world.''
Well, I don't know about you, but Owen's outlook sounds bullish to me. If he's right -- and I believe he is, this is just a "hot-money" correction, and we should see excellent buying opportunities on the other side. I won't try to predict exactly when that will be, but probably not too long.
Check out my new gold and energy blog at MoneyAndMarkets.com
posted by Sean Brodrick @ 3:37 PM
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