Mining Capital’s Alastair Ford caught up with Proactive Investors’ stocktube two days on from the historic election of Donald Trump as U.S. President.
Ford said: ”It’s been a very surprising week. I think that on the expectation of a Clinton win, people thought that the dollar would generally stay stable and that there would be a rate rise in December. Now it’s much more of an open question – some people say there will be a rate rise because Janet Yellen at the Fed will just want to carry on with the course she’s laid out … but on the other hand with Trump’s inauguration on January 20 it would be quite a bold move for Yellen to raise rates just before he takes power.”
He adds that once the dust settles there’ll be implications for the gold price and the way metals’ prices are set as well because clearly the dollar is the currency of choice for trading in metals and while copper and iron ore have managed to beat back the strengthening dollar and really rise on what Trump has said, gold hasn’t.
”There’s certainly been some quite significant moves up at the major level almost as soon as Trump opened his mouth. It’s interesting to see how this man can move markets with anything he says … companies with exposure to copper – Glencore, Antofagasta as well as a lot of the south American producers – they all rose”
Alastair Ford said: ”My own personal area of interest at this particular moment is what’s happening in Mexico. I find the Mexican situation in regard to Trump to present serious opportunity. Trump seems to be quite anti Mexico and the Peso has been in freefall against the dollar. What that means for the Mexican silver miners, especially the ones that have their reporting currency in dollars is that their margins are going to swing wider and wider on currency difference. So all the costs will be in Pesos while the money they raise on the markets will be in dollars – so they’ll be quids in.”
He cites Great Panther Silver Ltd (NYSE:GPL, TSE:GPR), which has just changed its reporting currency to US dollars. Others exposed to Mexico are Endeavour Silver Corp (TSE:EDR) and Hochschild Mining PLC (LON:HOCH).
Story by ProactiveInvestors