On Sep 12 2014, Lan Fusheng, Vice-Chairman of Zijin Mining Group Co.,Ltd talked about market trend when he was attending China Gold Congress: US decides gold price while China decides copper price.

Lan said that the gold price is influenced by many factors, but it is currently decided by economy and policies of USA. Because of the special relationship between dollar and gold, central banks of various countries will increase gold reserve when dollar falls due to economic problems in US. Therefore, the US government takes gold price suppressing as one of the main measures to implement its "strong dollar" policy. The slump of gold price in last April was the result of the manipulation by US. As a result, in a short run, it's difficult for gold price to rise due to the strong US economy and dollar. Meanwhile, cold war between Europe/America and Russia might happen again, so the geopolitical factors will support gold price. Therefore, the gold market is promising in the long run.

As for the copper trend, Lan expressed that series of measures and policies, including micro-stimulation, steady growth, anti-inflation and tax reform, taken by China's new central government have shown its effects. China's economic performance in the first half of this year was much better than expected. As for the real estate bubble, the housing price has fallen in third-tier and fourth-tier cities, but still holds up in first-tier cities. We can say that China's economy is not that bad as imagined, and it is expected to remain its healthy development, which will sufficiently stimulate copper demand. Therefore, copper price is expected to be steady in the short term. However, once the copper production capacity is fully released, the cost will rise due to grade drop of copper mine resource. Consequently, copper price will keep going up in the long term."

As for the resource merger opportunity, Lan believed that now it is still a good time for M&A, although the bottom of resource valuation has passed. Because of the fear of double dip in global economy, the international mining industry has started to fall since 2012, which has caused the continual dropp in share prices of mining companies. Due to the lack of market confidence, it is hard for the mining companies to finance, leading the share prices of many primary exploration companies to fall to less than 10% of their peaks. The share prices of large-scale mining companies have also dropped significantly, many of them even have fallen to their level in 2008. Last July and August showed us the bottom of mining market. As the market fund becomes loose gradually, the financing for mining companies will be improved and their share prices will recover gradually."

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