Hi Peeps, well Gold got mashed last night down to $650, Silver is @ $12, Copper is @ $7,600t and Zinc is @ $3,200t
Now heres whats interesting, when I did my little valuation sheets for stocks like CBH and JML I was using a Zinc Price of $3,000t - $3,400t, a silver price of $12 an oz and a Copper Price of $6,000t, I forgot that we were at these levels about 1 month ago and these stocks were screaming buys )IMO and to most brokers who were using far more conservative metals prices Patersons, Hartleys, Bell Potter, Fat Prophets)
Have a look at CBH and JML see if you can find the valuation sheets I put up, point is using these metal prices the stocks were screaming buys, didn't really bother to adjust prices upwards as I thought they were running to hard,
People must take everything into consideration, most analysts are saying
U.S. copper futures have corrected more than 10 percent since record highs on May 11. But analysts say the fall is not too big, given the extent and the size of this year's rally.
Analysts said fundamentally the market remained supported by bullish supply/demand imbalances and the potential for further labor disruptions due to several labor contract renewals this year.
Take BMO, it is being sold down crazily, as gold drops its the high margin producers who are insulated the most, BMO will be a 70k oz p.a. producer with intial cash costs of $300 AUD an oz dropping to $250 AUD an oz for life of mine, so when gold is @ $750 AUD an oz there margins are still huge, unfortunately players such as RSG and other high cost producers margins begin to disappear,
Now CVRD and Rio have just secured a 19% price increase for Iron Ore, which Japanese and European Steel Mills were happy to pay, now if JMS (see thread) can pull of its JV with Sino steel, then regardless of how 'worrying' inflation is blah blah blah, its mkt cap has to rise from under $10m,
Uranium spots have kept increasing, again regardless of all this other mkt sentiment crap undervalued Uranium deposit developers should be insulated to this sell off,
Point is although this downturn was a correction e needed and does effect all stocks due to its effect on mkt sentiment etc, don't overeact and throw away your value stocks, I'm sure the people who were 'dumping' OXR @ close to $1 in Oct correction and PEM @ under $1 know what I'm saying,
Most anaylsts and economists I'm speaking to don't really care where the mkt heads in the next 2-3weeks, as they also believe in the 'stronger for longer' theory, XSTRATA is doing a $19BILLION US T/O I'm pretty sure they too believe in the stronger for longer theory.
One last thought, if inflation worries are causing this sell off why has gold continued to get smashed? I'LL LET YOU ANSWER THAT ONE
Anyway just my two bob, no doubt monday will be another shocker as most people over-react to the falls