Gold prices are stronger. Expect stronger gold and oil prices as the Middle East is thrown into a frenzy of political turmoil by riots for democracy. The reality is that this is just the start of the democracy movement. These protests will spread like wildfire for several reasons:
1. Online social networking. You cannot stop it. There are technologies which will by-pass government scrutiny.
2. Wikileaks. there is only one agency disclosing embarrassing information about governments and corporations; tomorrow there will be hundreds of them. It will result in the credibility of government reaching a new low. Don't think that just Middle Eastern governments are worried. In fact politicians around the world who have engaged in corruption, and channelled kickbacks through secret Swiss bank accounts are more than a little worried by WikiLeaks.
We are likely to have democratic governments in the Middle East within 10 years. The implication is that these governments will have no reason to discount their petroleum to preserve the sanction of the US government. The implication is that we might be looking at higher petrol prices. This is not assured; though given the global shortage, we might expect OPEC to be stronger than ever. So there is a good probability of higher oil prices. Of course, the other reason is China, India, and global economic activity in general. We are in the midst of a technological revolution not seen before. Its not just China, its the unemployed in Libya, Turkey and the Philippines who are learning programming, or other online skills, and providing outsourcing skills to the West. Its an educational revolution. They are learning Western values. If they are really smart; they will leapfrog our structured democratic values, and develop a meritocracy....however that is improbable....since too few people are canvassing that.
Anyway, in such times, gold is very good. Many of the established producers are over-priced, so I am always looking for new, emergent stocks with good prospects for developing resources. In the last 2 weeks we have seen a favourite Vital Metals go from 10c to 17c, settle to 15c, and now its going for another rally. Today, we can see another favourite just starting to move. MIL Resources was unable to retain Sinotech as a strategic partner to develop its PNG interests. I am confident they will find a partner for these interests. They have a recent low of 2.8c, however the market at 3.3c is still cheap. They are sitting on a strategically valuable 4billion tonne titanomagnetite resource (i.e. iron, titanium, vanadium). I do not think this will be developed for 10 years, however its good to know they have it for the time the high strength steels market develops. These ores will be highlight sought after.
In the interim, the company has the Poi gold-copper deposit. Gold and copper prices are at all-time highs, so a company which has been soil sampling and trenching, getting attractive results, and will be ready to drill in 3mths looks rather attractive. In the short term, I am expecting this company to find a new partner to drill test the targets in this project area. PNG has some very substantial gold-copper resources, so the results from drilling will be very attractive. I would not be surprised to see a company like Indophil Resources becoming a JV partner.
