Both copper and gold may get a boost from the shutdown of the largest goldmine and second largest copper mine in the world. Physical supplies of gold are already tight in the Far-Eastern markets, and the closure of Grasberg for at least a few months may force consumers of gold and copper to look elsewhere to fulfill contracts if FCX has to declare force majeure. This mine closure follows a mine collapse at Bingham Canyonthat recently cut gold, silver, and copper output at the huge Rio Tinto (RIO) mine located in the United States.
This may lend support to a copper price that Goldman Sachs believes will drop in the next twelve months. But the real opportunity may be in gold because it seems that gold is just awaiting a catalyst that may propel it higher as shorts cover. This is a significant impact to supply, located in the part of the world with highest physical gold demand - supplies will have to come from elsewhere to meet these physical needs.
At http://harveyorgan.blogspot.com.au/ dated Monday, June 3, 2013 - scroll right down.
AMX Price at posting:
19.0¢ Sentiment: LT Buy Disclosure: Held
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