Resource shares were pummeled in 2014.Their prices remained lower than production in many instances and many despaired of precious metals such as gold and platinum group metals ever recovering again!
At the moment base and industrial metals are not much better off as main users as China and other industrial users have built up literally mountains of raw materials to keep prices lower for longer periods. A good example of this is iron ore and although chrome which is used in hardening iron ore for the main part price initially increased in the first part of 2014 ,the surplus in iron ore is now likely to flatten out the prices of chrome.
Now added this mix a surprising move has taken place with the sudden lowering of the oil price during the latter part of 2014!
Except to the traditional exporting countries this move has been a Godsend to the whole world which is still recovering from the deepest recession, which reached its lowest point in 2008 in modern times.
This is likely to have an electric effect upon the worlds freight movement stimulating commerce and then with more money to spend on needed goods and transport ,products such as autos and heavy machinery are likely to pick up in time as higher standards of living will start to make their presence felt in demands for resources.
Another thing which is likely to boost profits is that petroleum products make up about a third costs of most mines.
Labour another third, but as mines have become better run they have lessened their dependence on manual labour and gone in for mecinisation to a higher degree.
Both Gold and Platinum are starting to recover. Gold is a cyclical recovery and the reasons for its recovery are not always clear so when buying be sure to take note that reversals might take place at any time I for one think that the price of Gold will pass US Dollars $1300 per OUNCE. Gold shares are out performing the Gold ETF by an average of at least 30% over the last month and are likely to advance further- Naomi
SEE SIDE-BAR FOR TIPS on the special gold and platinum pages.
ALSO SEE POST JAN 1 / 2015: http://sashares2010.blogspot.com
