Suppose Benny just does some more talking and the ECB is not given full freedom to print "as needed" but is heavily constrained to meet Germany's concerns, then the POG goes back to around $1500 or lower IMO. The Shanghai index looks awful, down to a 3 year low, and has basically gone nowhere for 10 years. We are all waiting for their stimulus, especially our iron ore and coal plays.
There is no certainty so people have to make sure they are not betting with all their money and can afford to face a loss, perhaps with no recovery of share price. AMX may be in a stronger position than most goldie explorers because it already has found a lot of gold and has around $40m in cash. However, there are a lot of explorers that will fail in a low POG environment, as will a lot of miners.
POG AUD 1200 would kill off most of our junior gold producers. Even goldie stars like SLR would struggle.
If US equities finally have a major selldown this year than so will our goldies, even at today's POG. Although I would expect the USD POG to also fall.
This is a RO/RO world.
Caution is warranted.
So far the Africa Downunder Conference is not having a noticeable positive impact on our goldies, even those that have already presented. The trouble is that our companies are now well known and those that have are interested in them have already bought or are waiting for CBs to juice the markets.
loki
AMX Price at posting:
52.5¢ Sentiment: ST Buy Disclosure: Held
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