Charlie Gibson, Head of Mining for Edison Research, joined Zak Mir and Mike Ingram on the Tip TV Finance Show to discuss the mining sector, with a specific focus on Gold, Oil and the firm Kefi Minerals Plc (L:KEFI).
Gold price to new recent lows
Gibson commented that following the BHP disaster, the gold price has fallen to new lows in recent period. He added that everything is against the mining sector at the moment, with the BHP event being the most current news to damage the sector. In the wake of a Fed interest hike, Gibson outlined that the previous bottom of the market was marked by the first turn to negative real interest rates, and this was the killer for gold.
Painful process ahead for Oil
Ingram noted that we are going to achieve the weakest global growth for 6 years, which bought Gibson to highlight that oil isn’t being kept low by supply alone, but demand too. He believed that the demand in the global economy is falling, and the supply of oil is playing catch up. Thus he concluded it is difficult to know when oil will turnaround.
An opportunity in KEFI
Gibson finished by expressing that KEFI has a good future, as it moves from an explorer to a developer, and if it can leverage this move to cash flow the company could be one to watch.