Frey M.,Cambridge Mercantile Group |
Smith S.,Cambridge Mercantile Group
Canadian Mining Journal | Year: 2014
Dealing with liquidity drainage from the financial system, the global market place has seen risks become more regionalized, which has brought new complexity to the game for participants in the commodity and FX markets. Emerging market economies that, up until recently, have enjoyed strong capital inflows as traders and investors parked their money in these regions in chase of higher-yields, are now seeing those same flows reverse. For the precious metal market, it would be an understatement to say that it has been a rough couple of years and with the Federal Reserve's commitment to ending their balance sheet expansion by the end of 2014, as inflation remains well anchored around the globe, new challenges are likely ahead for the commodity sector as a whole in the near-term. The gradual unwind of Quantitative Easing will most likely keep a lid on precious metal prices, but the FOMC's guidance towards an interest rate rise as early as mid-2015 is not all bad news for Canadian-based mining companies.