Gold and Silver Juniors, Mid-tiers and Producers Message Board

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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: Proud Deplorable who wrote (11248)	5/14/2006 1:53:13 AM
From: zoo york	Read Replies (2) of 78415

Froth or not, one thing that stands out to me is that the metals stockpiles continue to shrink. So often during past cycles, when metals prices started to rise, there would be a feedback loop of increased production leading to a glut, and then collapse. This time around, I do not think there is going to be a big increase in production anytime soon. There is a well documented shortage of equipment and personnel that will trip up any large new mining projects. So people can point the finger of blame at the hedge funds and speculators all they want, but if you MUST have base metals, and will pay any price to secure them, then I doubt the low stockpiles will do anything to discourage higher metals prices yet to come. I have been hearing for more than a year that moly prices were unsustainable. I have seen copper prices debated since the spot ran above a buck. This week we surpassed $4 and I still do not think we have seen the top. And dont even get me started on all the wrong calls that have come out of left field for O&G prices. I dont think anyone has called that one right since the 90s. My take is that people have so long been accustomed to the luxury of rapid and easy supply increases that would flood a market when prices ran higher. We do not have that luxury anymore in most commodities, so higher prices may be here to stay. Will they stay at multidecade highs? I do not know but I do think we will remain at the high end of the historical range for a long time. I am not going to lose any sleep worrying about the intensity and duration of a possible correction. cheers! COACH247

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