Commodities: we are approaching at least an Intermediate Low

Posted by Marc Faber

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ifSaAJ8srEUU“Technically, commodities look horrible…precious metals look bad. But tech factors would suggest we’re approaching at least an intermediate low. The commercials, which are essentially hedgers, people who produce gold and so continuously hedge, at the present time they have an extremely low short exposure, basically they’re accumulating gold.

    “Whereas gold is close to $1,300 compared to say $700 in 2008, conditions in the mining industry are horrible. The exploration companies are running out of money and industry conditions are worse than they were in 2008. So I think that a lot of supply that potentially comes to the market through new exploration will simply not be there. In emerging economies sovereign funds, central banks and individuals will continue to accumulate physical gold.” – in marketwatch

I think the Markets are worried about something else

“…not because of Fed’s statements because, like always, they hedged their bets in the sense that this tapering off would not necessarily stop. Mr Bernanke said if the economy does not improve along the lines that we expect we will provide additional support. I think the markets are worried about something else,” – in marketwatch

The Chinese Economy is much weaker than the official Statistics suggest

“The Chinese economy is much weaker than the official statistics suggest. At the present time, the Chinese economy is, at the very best, growing at 4% per annum. Without huge credit expansion there would be no growth at all.” – in marketwatch

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