Welcome to a very brief overview of the recent performance in the markets. The essentials are captured in the table below and each week we will show a chart of interest.
We commented last week that it would be interesting to see whether gold’s rally had involved short-covering; indeed it had and with fresh longs also, the net long managed money position rose from 50t to 82t in the week to Tuesday 28th May. This though is by no means over-extended (although Friday’s action may have changed that). The markets are increasingly risk-averse and with China upping the stakes and equities now under pressure gold has punched through $1,300 and is now short-term over-bought; support at $1,300 if needed.
U.S. Mint numbers show that sales of American Eagle coins in May were just 4,000 ounces, against 10,000 ounces in April. Year-to-date sales are 104,000 ounces (3.24t), compared to 96,000 ounces (2.99t) in the first five months of 2018. Silver sales were also down, at 866,000 ounces, but April was exceptional for silver sales. Year-to-date sales are 8.99M ounces (279.5t) against 6.39M ounces (198.7t) in Jan-May 2018.
Meanwhile shareholders have approved the Sibanye-Stillwater / Lonmin deal, which now makes Sibanye the world’s largest platinum producer. The company has already been looking at rationalisation programmes. The Union appeal against the merger was dismissed in mid-month and with the triennial wage negotiations imminent, and also with Impala looking as if it may play hardball, we could be in for some turbulent times in the sector.