June 02, 2012
That Was The Week That Was … In Australia
By Our Man in Oz
Minews. Good morning Australia. How did your market perform in another difficult week?
Oz. Not as badly as might have been expected, but we’ll almost certainly be hit hard on Monday because the big sell-off in New York on Friday came after we had closed, and also, incidentally, after I had started a long-haul air trip over to your part of the world.
Minews. Yes, you mentioned a spot of travel over the next few weeks, while keeping an eye on your home market, so let’s make this the first of a few short reports for June.
Oz. Thanks, though I suspect that your readers will be grateful for hearing as little as possible about a market which is looking more shell-shocked by the day. As ever, it is the problems of Europe which are dragging the rest of the world down, though unlike the American version of the same excess-debt crisis which hit in 2008, this version appears to have no early solution because of the fractured and fractious nature of the European family.
For Australia and other resources-focussed economies, it’s a case of plugging ahead, and hoping that the major nations can agree on a solution that restores demand for commodities. Unfortunately, in Australia’s case there is the added problem of a government in deep political trouble, thrashing about looking for gimmicks and stunts to maintain its grip on power. The net result is a sort of stalemate which is hurting the small miners most, but which is also causing the big miners to put up the shutters when it comes to new-project investment.
Minews. Time is tight, as you have mentioned, let’s move quickly to prices.
Oz. Okay, bearing in mind that you’ll need to put a history filter over everything that happened last week because New York’s 2.2 per cent fall will flow into the Australian market on Monday, knocking out last week’s modest 0.8 per cent rise in the all ordinaries index, and the 0.6 per cent rise in the metal and mining index. The one sector that should produce good news next week will be gold, which reacted solidly to New York’s equity correction and to talk of more quantitative easing, code for more paper money and higher inflation in the future. Those concerns lifted gold to around US$1,625 per ounce late on Friday, and up to A$1,675 per ounce on conversion.
Source >> www.minesite.com