Tomahawk, WI 07/24/2014 (Basicsmedia) – Geo-Political tensions in Iraq, Russia, Ukraine and Syria continue to dictate market conditions according to MD&CIO Swiss Asia Capital, Juerg Kiener, greatly affecting the prices of oil gold and Palladium. According to Mr. Kiener in an interview on CNBC, the Geo-political tension as well as ‘fracking’ costs should drive oil prices even higher as we near the close of the year. Spot Gold is already high, as a result of the Geo-Political tension, awaiting to see the long-term effect of the uncertainty in the markets inequalities in chains of demand and supply.
“On the energy side you’ve got issues on tension and Fracking so we have a lot of underlying issues to be resolved for prices to fall significantly” said Mr. Kiener. The current standoff in some of the countries is greatly affecting levels of demand and supply that should significantly push the prices of Gold even higher according to Mr. Kiener.
The uncertainty due to the Geo-political tensions has seen record high-paper contracts being issued with the elasticity levels expected to force people in the long-run to try and cover for short positions. Palladium has also been on the rise in the market in terms of prices mainly attributed to supply constraints with increased demand.
The fact that many people on the mining side are making losses or only breaking even has led to the production of high quality or high-grading output leading to a delay in production, consequently affecting supply chain. “Having the fact that many people on the mining side are producing a break even or losses, basically, tells you that we have to concentrate on high grading, on high-quality output, and that means lower output going forward,” said Mr. Kiener.
The impact of low supply means that many people in the Palladium space are essentially trying to squeeze more supply for next year and with speculators coming in, Prices are always destined to go high