Charlie Gibson, Head of Mining at Edison research, joined Tip Tv to share his observations on Commodities and Mining companies.
Key points from the video:
Metals price performance in long-term: 2002 – present
Metals price performance in the short-term – year-to-date
Major mining companies’ share price performances - year-to-date
Gold closer to a bottom
Fed pushing US inflation higher
Miners in the middle of a perfect storm
Gibson explains how the stock market and growth scenario in china, US equity performance and the rate hike sentiment surrounding the Federal Reserve bodes bad for commodities.
Metals price performance over long and short-term
Gibson compares the performance of metals over the long-term and short-term charts, and notes that Palladium and Nickel remain the worst performers in both the charts. When it comes to big movers, Silver and Copper grab the top spot.
Share price performance of Major mining companies
Taking a look at the performance of share prices of major mining companies over a year-to-date basis, Gibson sees the quality companies outperforming the weaker and questionable companies. He further prefers adopting a sell approach on BHP Billiton PLC (LONDON:BLT), and a buy approach on Randgold Resources (LONDON:RRS).
Gold: Closer to the bottom of the range than highs
Gibson explains that there exists a Gold dip opportunity towards $800, but the yellow metal is seen closer to a bottom. A dip below $1000 is possible on a favourable US rate hike and inflation scenario, to which he sees the money printing by the Fed as a possible factor which might lead to a pick-up in the inflation numbers.