From Coal To Gold Prices: The Influence Of Mining Shares On The FTSE 100  

While everyone seem to be in the middle of a Gold Rush Silver has been steadily growing in worth .
Although Silver has not grown at the same rate as gold it will probably never reach the dizzy heights of gold.
One investor tried to corner the market in silver but was eventually thwarted.

by wallyg

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From Coal To Gold Prices: The Influence Of Mining Shares On The FTSE 100  
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Article by Nicholas Dockerty

Financial spread betting is fast becoming an essential extra tool for investors and traders to use to take advantage of shifting short-and long-term trends on the financial markets. One of the reasons it's attractive to seasoned market participants is the sheer amount of markets you can take a position on.

For instance, if you were interested in the mining industry you could spread bet commodity prices, industry sectors, forex, indices, shares, binaries and options.

Since the start of the global recession we've seen commodity prices steadily rise. While the headlines tend to be taken each week by gold breaking another price record we've seen the prices of aluminium, coal, copper and silver go up too.

As a result of this trend we've seen the profits of the major mining and metal based companies' rise and rise and begin to dominate the direction of FTSE 100. There are now thirteen such companies in the FTSE 100 and they are:

Rio Tinto; BHP Billiton; Fresnillo; Kazakhmys; Eurasian Natural Resources; Vedanta; Lonmin; African Barrick Gold; Antofagasta; Xstrata; Randgold Resources; Johnson Matthey; Anglo American.

While it's a heavyweight industry - accounting for well over a third of the total market capitalisation of all the companies within the FTSE 100 - it's also a fragile one too.

Substantial profits make for healthy share prices. However, with mining companies being so dependent on commodity prices and commodity prices being so dependent on a range of factors not always in the direct control of the mining companies, the day-to-day share prices of mining companies are prone to fluctuate.

Each commodity has its own unique combination of factors that will influence it.

If the Central Bank of China announces it's trying to slow down its economy by raising interest rates it will affect the price of copper as demand is likely to fall for commodities used in manufacturing. If the US dollar rises after a boom in domestic GDP then the price of gold will be affected as demand for the precious metal will fall as it won't be such a successful hedge against a weak dollar.

There is no doubt then that mining companies are increasingly exerting a powerful influence on the overall direction of the UK's leading index. And more so than ever before it's better to look at the broader FTSE 250 to get a more truer picture of how well UK plc is doing.

Indeed, consider what affect a major fall in commodity prices might have on the direction of the UK's leading index?

About the Author

IG Index is the leading spread betting company in the UK with one-in-two UK financial spread bettors having an account with them - according to a survey by research organisation Investment Trends. You can find out more at www.igindex.co.uk.

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Gold Is Where You Find It by Tyrone Comfort


Image by ctankcycles
This painting thrusts the viewer deep into a California gold mine where a sweating miner braces one foot against his powerful pneumatic drill. He is wedged into a crevice, boring holes that will be stuffed with dynamite, which will blast open new sections of the gold vein. California painter Tyrone Comfort brings the viewer uncomfortably close to this miner, stripped to his shorts and work boots in the suffocating heat of the mine. The vibrating drill fills the narrow space with jarring noise and throws dust and bits of rock at the unprotected man. Rough logs are all that hold up the low ceiling of the shaft. Comfort's vigorously painted image leaves no doubt that a professional miner needs tremendous strength and toughness to endure these conditions.

Rising gold prices during the Great Depression caused many old mines to reopen and sent the hopeful across the American West in search of new strikes. When President and Mrs. Roosevelt chose this painting to hang in the White House, it represented a rapidly rising industry helping to fuel the reviving American economy.

Buy iodine, sell gold and forget the Aussie
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With all the present volatility in the markets, what's perhaps most surprising to gold's true believers is how very little the precious metal has done.

FED sued over Gold Price manipulation, gold reserves used to suppress gold!

www.kereport.com GATA today brought suit against the US Federal Reserve Board, seeking a court order for disclosure of the central bank's records of its surreptitious market intervention to suppress the monetary metal's price. The suit was filed in US District Court for the District of Columbia and targets Fed records involving gold swaps, exchanges of gold with foreign financial institutions. In a letter dated September 17 this year to GATA's law firm, William J. Olson PC of Vienna, Virginia, (www.lawandfreedom.com) Fed Board of Governors member Kevin M. Warsh acknowledged that the Fed has gold swap agreements with foreign banks but insisted that such documents remain secret www.gata.org The lawsuit follows two years of GATA's efforts to obtain from the Federal Reserve and the US Treasury Department a candid accounting of the US government's involvement in the gold market. These efforts parallel those of US Rep. Ron Paul, R-Texas, who long has been proposing legislation to audit the Fed. The Fed has wrapped in secrecy much of its massive intervention in the markets over the last year, and Paul's legislation recently was approved by the US House of Representatives.
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