Global doubts but gold...

Global doubts but gold confidence

http://www.theaustralian.news.com.au/business/story/0,28124
,25678216-15023,00.html

SO we have the World Bank predicting the global recession will be worse than expected and that growth this year will hit 2 per cent.

In reality, 2 per cent is essentially standstill mode.

So no growth, then.

Yet, also overnight, that the latest survey shows sentiment among large manufacturing companies in Japan improved markedly over the previous month. Moreover, there is no talk about rising Japanese industrial production in the coming months.

Unless the Japanese have some magic trick up their sleeves, an up-tick in production is not really reconcilable with a longer global recession.

For the moment, though, the market is looking on the gloomy side. Is it just two weeks since the base metal prices seemed to be heading back to the stars? Last night gravity won: aluminium was the biggest loser, falling 6.3 per cent. You have to be surprised that the metal has shown any recent resilience given that London Metal Exchange inventories still stand at 4.3 million tonnes. All the other metals took big hits, too.

Gold fell below the $US920/oz mark, but the receding prospect of getting back to $US1000/oz doesn¡¯t seem to have given any pause to the explorers.

First, there is today¡¯s extraordinary move by Michael Kiernan to recapitalise Monarch Gold Mining Co through his Stirling Resources and get the Davyhurst mine back into operation. Given Kiernan¡¯s high hopes last time around for Davyhurst, it may be worth suspending judgement on this move, but it does seem like getting burned by a hot stove and then touching the element a second time.

Africa continues to attract gold explorers like a light draws moths. Now Adamus Resources has increased its land holding in Ghana, while Indago Resources, the former Western Metals, has started drilling at its Nyanzaga deposit in Tanzania, targeting high grade zones. The former owner, Sub-Sahara Resources. reported 4.5 million ounces of gold at the Tusker deposit within Nyanzaga. And Golden Rim Resources is marshalling some of the $3.6 million from its recent rights issue and placement for new drilling at Sepola in Mali ¨C a deposit that lies along strike from the huge Sadiola and Yetela mines (which contained a total 15 million ounces).

On the local scene, Alchemy Resources reports some good grades ¨C including 5m at 6.4 grams/tonne and 15m at 3.2g/t ¨C from its Hermes project in Western Australia, located 60km from the huge Plutonic mine.

Meanwhile, the market has never really got interested in Queensland Gold & Minerals which is surprising considering that global giant Newmont Mining Corp has taken a very lively interest. We hear today that NEM has begun field work at the junior¡¯s Malcolm Creek gold project south of Forsayth, Queensland. NEM doesn¡¯t get interested in projects unless they have the potential to be very big, yet QGM remains unloved at 2c.