Ann: FY21 Financial Results Summary, page-28

China announced an attack on commodity price inflation about 2 months ago. We've been seeing a rationalisation of commodity prices since and seemingly ongoing. The A$ is suffering accordingly.

While many commodities have experienced record pricing over the past year, PMs have underperformed.





PMs had boomed preceding the rise in other commodity prices on the back of astonishing pandemic based US QE. The current US Administration still has plans in place to expand the debt ceiling by a further US$6t, although even some Dems are considering crossing the floor to avoid that level of spending.


We're now seeing a selloff in Gold Equities, on the basis of an expected stronger US$. Many US commentators are now expecting rising US 10 Year Treasury Bond yields. Higher interest rates should cause a stronger US$ and weaker asset prices. A stronger US$ should in turn cause weaker commodity prices.

SLR has seen one substantial shareholder, the USA based Vanguard Group selling down its investment but no mention (yet?) of largest shareholder Van Eck? I noticed the following on a Steven Van Metre YouTube video today:




It would seem sentiment is negative on all Gold Equities. Especially the higher cost producers ... and just as SLR announce higher projected costs on the current FY2022. Although admittedly only a return to FY2020 costs level.

The recent fall in Gold Equities was compounded by the Gold flash crash and a slump in the A$ Gold price.

The A$ Gold price has recovered and more, yet the share prices of Gold Equities languish.




My point is, even if the Gold price falls (due to a stronger US$) the A$ Gold price will maintain. The Chinese attack on commodity price inflation will further weaken the A$ (the Chinese are returning to domestic production, such as IO) and in fact lead to lower world PPIs and assist large economies in battling inflationary forces. The USA will continue to expand their debt ceiling supporting higher Gold prices anyway.

I'm expecting a slingshot in Australian Gold Equities sometime this CY.


Michael Burry (the Big Short) does not like Gold or Bitcoin. He says the USA will attack any threats to the US$.

Personally, I think the USA will not have much choice with World trade having flipped. Also with the expanding threat of hacker based terrorist attacks on US infrastructure, the emergence of AI superintelligence, Bitcoin servers just lay in wait for their "Fight Club" moment.








The Powell address at the coming Jackson Hole, State of the Nation's Finance address soon, should provide some resolution.