Resource Sector Outlook October 2010.mov

We're now in the 4th quarter of 2010, and we're very pleased to see that the markets are doing pretty much what we thought they would be doing with our views over the last couple of years out of the big fall in 2008.

What we're seeing is a gold price move up to US$1400, having a bit of a pull back at the moment, but it's just marking time and I still expect to see US$1500 by the end of the year and we're also seeing follow through in the gold stocks, it's been very robust in the local market, particularly amongst the smaller stocks; amongst the larger ones people are a bit concerned about the strong Australian dollar, bringing back the gold price, but the net effect is that the resource sector is now looking towards a very, very, strong 2011, we'll have , I think, a very strong quarter in its own right.

The big gold stocks are looking good in my view, not that there's many of them in Australia, but internationally they're doing very well, but it's really at the smaller end where we're finding that value is obvious if you want to look and I think we're going to see some really outstanding performances in many of the gold stocks.

The thrust of our presentation at the excellence in exploration and mining conference in September was really to talk about this global dichotomy, the Asian areas making up the east and the southern areas basically being South America, Australia, parts of Africa, being very, very, robust.

These economies are growing very strongly and will make up more than 60% of world growth over the next few years and that really means basic industries, raw materials, in strong demand; commodities in strong demand.

So, the outlook there for the demand side, coupled with tight supply means that commodity prices will be quite firm and we're also seeing the debasement of the US dollar, and other currencies, which will be pushing the precious metals up.

All in all its going to be a very strong year for commodities over the next 12 months.

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News & Politics

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• US dollar
• Commodities
• Australian dollar
• Gold Price
• Martin Place Securities
• Resource Sector Outlook