(MENAFN- ProactiveInvestors)Commodities Keeping the commodity side light this week lots on the corporate front... Diamonds and precious stones Reported this week is a mere $70m of goods sold at the latest De Beers sight. This is unprecedented and could herald a massive change in the industry in the coming months... We are in unknown territory here. As mentioned last week factories remain shuttered for Diwali. Singles day in China saw online sales exceed that of the US' Black Friday. Sadly the term "single" implies engagement rings are not going to be top of the wanted list! Precious metals The WGC published its third quarter trends report this week that estimated total gold demand rose by 8% year-on-year reaching a two-year high of 1120.9 tonnes. In an unsurprising spot of analysis the WGC noted that "Q3 2015 was a period of two distinct halves: ETF outflows contributed to a price dip in July which boosted consumer demand around the world. Subsequently a positive shift in institutional investor attitudes led to modest ETF inflows in August and September which pushed prices back up" It is always interesting when you see Central banks buying with another 175t tucked away up from 127.9t in Q2 as Russia China and Kazakhstan went shopping. A bullish sign Apparently the supply of gold from mine production fell by 1% in the third quarter. Maybe not then. PGM's: Palladium finally catching up with its big brother This week: Gold: (0.3%) Silver: (3%) Platinum: (6.5%) Palladium: (11.7%) Rhodium: (1.3%) Base metals: Copper lead and Zinc are all kicking around multi-year lows as concerns over China continue to dominate the minds of investors. The latest kick in the teeth came from a collapse in fixed asset investment to a 15 year low this after seeing industrial production data whimper through October. Interestingly PPI data (no not mortgage claims) has now fallen for 44 consecutive months. The red metal's latest leg down comes after statistics from China responsible for more than 45% of global copper demand indicated a broad measure of credit growth in the economy total social financing slipped 11.8% bringing credit expansion close to the all-time low of hit in June. Fixed asset investment whilst up 10.2% year on year through to October is now on a run of 17 straight monthly declines. This week: Aluminium: (2.3%) Copper: (3.4%) Lead: (3.3%) Nickel: (2.4%) Tin: +0.6% Zinc: (3%) - So much for a bull market 6 -year lows on oversupplied market. Bulk commodities: Iron ore is again falling in line with the wider commodity complex down around 2.5% this week. For those following events in Brazil the mudslide is now approximately 440km in distance or roughly the distance to Gretna Green from London... Company announcements/news/meetings: Caledonia Mining (LON:CMCL) Buy (PT: 16.5p) Q3 results issued yesterday. "Caledonia Mining's Q3 results serve to reiterate our positive stance on Caledonia Mining. The commissioning of the new tramming loop has enabled Blanket to increase gold output levels offsetting the impact of lower grades and recovery rates. Despite weakness in the underlying gold price we believe that Caledonia will continue to produce relatively low cost ounces within a clearly defined production growth profile whilst offering shareholders the protection of a significant cash position and a dividend yield in excess of 7%. We reiterate our Buy recommendation but trim our price target marginally to 53p (from 55p) based on our revised long term gold price forecasts" Here's a gold company chart as rare as hen's teeth. Note available upon request Centamin (LON:CEY) Hold (PT: 67p) Possibly not the update many were anticipating especially when considering the notable rise in costs. However I was surprised to note such negativity surrounding the decline in EBITDA and EPS during the period... Was I the only one that saw the gold price go down Hold your nose for Q4. If costs are not hauled back into line I would expect a far longer conference call than the 16 minutes managed on Wednesday. DiamondCorp (LON:DCP) Buy (PT: 16.5p) Following on from the update last week we saw some nice pictures of the conveyors bringing UK4 ore to surface this week. "DiamondCorp has confirmed the long awaited commissioning of the underground conveyor belt system from the first production level. We believe this is another significant milestone in achieving commercial production by the end of the year. We reiterate our Buy recommendation and 16.5p target price" Have a look yourself. http://www.DiamondCorp.plc.uk/investors-and-media/photo-gallery Note available upon request. Gem Diamonds (LON:GEMD) Buy (PT: 185p) We had a quarterly update from the co this week which when you consider an upgrade to market expectations has to be a good thing "Gem Diamonds Q3 sales and operational update exceeded our expectations. Strong operational performance during the period has prompted management to increase production guidance for the full year. Robust controls over costs and solid demand for Letšeng goods reinforce our Buy case". Gem is ridiculously cheap at these levels sooner or later this will bear fruit for investors. Note available upon request Petra Diamonds (LON:PDL) Buy (PT: 135p) In light of the weakness in the diamond market we have published a "what if" note. Now to be clear we don't think it will come to a "r" word but many have raised it as a means to remove the constant fear over the balance sheet that is forecasted every six months. The company retains considerable flexibility both through potential covenant relaxation and should it need a slowing of capital expenditure for the processing plant - Opening fresh ore remains a sacred cow and of course the Cullinan processing plant will continue operating in the meantime. "What if a banker rings you up and asks if you could be made inside We believe the market now assumes a fundraising in some form or another will come from Petra Diamonds. Our view is that if that is the case then the earlier the better as waiting only increases the angst among existing shareholders. We remain Buyers on a long term basis as beyond the balance sheet fears a very good business still exists." Note available upon request Major movers this week: Lonmin (55%) - Dropped Kaz Minerals (30%) - N/c First Quantum (25%) - N/c Petra Diamonds: (25%) - Buy 135p Acacia Mining: (12%) - Hold 250p Paragon: (10%) - Hold 5p Central Rand: (10%) - Buy 15p Centamin: (7%) - Hold 67p
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