Crude Modestly Higher ahead of FOMC Meeting

ONG Focus | Insights | Written by Oil N' Gold | Sun Oct 31 10 23:05 ET

Crude oil price climbed higher in Asian session on Monday as USD's decline ahead of the FOMC meeting raised appeal for commodities. Data showing strong manufacturing activities in China also boosted oil prices. Gold kept hovering around 1360. We believe either upside or downside surprise from Fed's QE should benefit positive for gold in the long-term. However, a milder than expected dose of QE may trigger selloff in the metal in the near-term.

Economic data released last Friday were mixed. US GPD grew by an annualized pace of +2% (consensus: +2.2%) in 3Q10, from +1.7% a quarter ago. University of Michigan consumer confidence was revised down -0.2 points to 67.7 in October. While the ‘economic conditions' index rose +3.6 points to 76.6, the ‘expectations index' fell -2.7 points to 61.9.Chicago PMI, however, beat market expectations and improved to 60.6 in October. We believe the set of data should not alter the Fed's decision to announce new QE measure at the meeting this week.

The dollar fell against major currencies with the exception of Japanese yen. The market forecast the size of Fed's new bond-buying program would be $1-2 trillion but it may begin by announcing $500B over several months or $100B per month. Apart from purchasing Treasury securities, the Fed may modify its language used in the accompanying statement. At the Boston Fed conference, Chairman Ben Bernanke said that 'clear communication about the longer-run objectives of monetary policy is beneficial at all times but is particularly important in a time of low inflation and uncertain economic prospects such as the present' and the FOMC will continue to 'actively review its communications strategy with the goal of providing as much clarity as possible about its outlook, policy objectives, and policy strategies'.

China's PMI expanded to 54.7 in October from 53.8 a month ago. This is the fastest growth pace in 6 months and signaled the country's economy can sustain through the government's tightening measures. This is also positive news for the oil market as, according to IEA, China has overtaken the US as the world's largest oil user.

With the exception of gasoline, speculators were bullish on oil sector in the week ended October 26. Net length for crude oil surged +24 441 to 125 271 contracts, the highest level since January 2010. QE anticipations and rise in European oil demand due to strikes in France have helped attracting capitals. Net length for heating oil added +963 to 29 605 contracts but that for gasoline fell -4 404 to 57 683 contracts. Net shorts for natural gas dropped for a second consecutive week, by -8 130, to 165 744 contracts, the lowest level in 8 weeks.

Speculators trimmed long positions in gold and silver but staying positive for PGMs. Net long for gold fell -10 666 to 239 086 contracts while that for silver slipped -2 788 to 26 743 contracts. Prices, however, were a tad higher. Net length for platinum climbed +1 181 to a record of 26 743 contracts while that for palladium gained +851 to 16 134 contracts, only slightly below a record high of 16 185 contracts made in May 2010. Recovery in the auto sector and new emission standard in the US have been buoyant for PGMs as they are mainly used as autocatalytic converters.

 

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Sentiment Sours ahead of US GDP

ONG Focus | Insights | Written by Oil N' Gold | Fri Oct 29 10 07:07 ET

Investors lightened positions ahead of US GDP report and next week's FOMC meeting. Risk aversion dominates the market as the pace of US recovery is not sufficient to reduce unemployment and bring inflation back to a normal level. USD and JPY are being sought. The euro tumbled as sovereign concerns in peripheral European economies remained worrisome. Commodities fall in European session with WTI crude oil price sliding to as low as 81.4 and gold remaining pressured below 1350.

US GDP probably expanded at a +2.2% annualized pace in 3Q10 as driven by growth in consumer spending, business investment and inventory growth. While this would be an improvement from +1.7% in 2Q10, the pace of recovery remains gradual and unsustainable. It's likely that the unemployment rate will stay around 10% for some period with such slow economic growth.

The market has fully priced in new QE measures - large-scale asset purchases- from the Fed next week. Yet, there have been heated debates on the size and time of the program. There are several possibilities that policymakers will choose to begin the program: 1) To buy $500B or more in longer-term Treasury over a period, say 6 months. 2) To buy $100B per month with re-evaluation of the program on every FOMC meeting. There's an implication that the purchase will continue until some sorts of improvement are seen in the economy. 3) To buy $50B or less every month. Ultimately, total purchase would amount to $1-2 trillion in all 3 scenarios. Apart from the asset-buying program, the Fed may adopt new communication strategies in ensuring the market that exceptionally low interest rates will be kept for an extended period. More importantly, the Fed will give a clearer idea on what ‘extended period' mean.

Euro's decline amid sovereign concerns in debt-ridden European economies weighed on gold in the near-term. The woes resurfaced as the Portuguese government failed to approve a debt-consolidation plan. In other peripheral nations, Greek Finance Minister George Papaconstantinou the country has ‘serious tax compliance issues and a review of Greece's 2009 Budget showed the deficit was above +15% of GDP, exceeding previous projections. In Ireland, note holders of Anglo Irish Bank Corp plan to oppose a debt exchange worth 20% of their 1.6B euro of securities. Spreads between peripheral bonds and German bunds widened.

Economic data released in the 16-nation region failed to alter euro's outlook in the near-term. Unemployment rate stayed flat at 10.1% while flash CPI reading rose +1.9% y/y (consensus: +1.7%) in September from +1.8% a month ago.

 

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Crude Oil Climbs but Remains Below 82 ahead of Inventory Data

Crude oil's recovery was capped below 82 as investors remained cautious about risk-taking. Sovereign crisis in peripheral European economies remains a big concerns, S&P's downgrade of Ireland's ratings indicates a bailout may not be able to solve the country's underlying problems. Meanwhile, the risks of contagion intensified with Portugal the next country expected to seek rescues. Gold price remained firm with the benchmark Comex futures hovering around 1380. Tensions on the Korean Peninsula have remained an overhang in the near-term.

Market sentiment has been dominated by macroeconomic and geopolitical tensions, overshadowing economic data which were rather encouraging. Yesterday, the US government upgraded GDP growth for 3Q10 to an annual rate of +2.5%, beating consensus of +2.4% and initial estimate of +2%. In European session today, IFO reported that Germany's business climate index rose to a record high of 109.3 in November from 107.7 a month ago. 'Current assessment' index and 'expectations' index also improved to 112.3 and 103.3 from 110.2 and 105.2 respectively.

The FOMC minutes for November were published yesterday. Few surprises were delivered so market reactions were not strong. The Fed released latest projections with GDP estimated to rise at 3-3.6% in 2011 versus prior forecast of 3.5-4.2% released in June. Unemployment is projected to be at around 9% by end of 2011, higher than prior projection of 8.5%. Inflation is expected to stay below the informal target of 2% through 2013. Policymakers had diverse opinions on the $600B asset-buying program despite the 10-1 vote. While most members expected the program to 'help promote a somewhat stronger recovery in output and employment while also helping return inflation, over time, to levels consistent with' Fed's mandate, 'some participants noted concerns that additional expansion of the Federal Reserve's balance sheet could put unwanted downward pressure on the dollar's value in foreign exchange markets'. These comments probably supported the dollar's strength.

As investors await the weekly inventory report from the US Energy Department, the industry-sponsored American Petroleum Institute estimated crude oil inventory rose +5.19 mmb to 357.73 mmb in the week ended November 19.Both gasoline and distillate stockpiles fell -0.50 mmb and -0.31 mmb respectively. The market forecasts the official data today will show drops in crude oil, gasoline and distillate inventories.

Weekly change in inventory as of 19/11/10

Comparison between API and EIA reports: Forecast (using API's inventory level)

API collects stockpile information on a voluntary basis from operators of refineries, 76% of the time, using data in the past 4 years.

Source: Bloomberg, API, EIA

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Gold Weakens Further as USD Rebounds ahead of G-20 Pledge

ONG Focus | Insights | Written by Oil N' Gold | Fri Oct 22 10 07:25 ET

Gold extended weakness to 1315.6 in European session as the dollar rebounded as G-20 finance ministers meet in South Korea. While the communiqué, which likely focuses on the currency market, should not alter the long-term downtrend of the dollar, it may decelerate the decline in the near-term. After all, the dollar index has slumped more than -12% since June. Investors would probably use any possible reason to take profits from their short-USD positions. Crude oil rebounded above 81 but the near-term outlook remained soft. The market held mixed views on China's oil processing data for September.

The recent rally in commodity prices has mainly driven by weakness in USD. Specifically for gold, while the yellow metal has made new record highs in USD-terms since September, price remains range-bounded in EUR-terms. Therefore, the outlook for USD is crucial for commodities' movements.

USD rebounded as finance ministers from the world's 20 largest economies meet to discuss above currency tensions between industrial and emerging countries. While we do not expect the conflict originated from global economic imbalance will be resolved, the statement released by the ministers may ease the tensions temporarily.

Spoke at an economic forum, Kansas Fed President Thomas Hoenig reiterated his stance against further easing. He said that ‘Monetary policy is about an environment that's supposed to be stable…When you try to use it in a way that floods the market with liquidity, you can in fact get very bad outcomes'. The next event risk for the dollar is the November FOMC meeting. The market has priced in announcement of additional easing measures after the meeting.

Currently trading at 81.2, the front-month contract for WTI crude oil has been fluctuating above 80 over the past few days. China implied oil demand rose +6.2% y/y to around 8.68M bpd. While this is the second largest reading after the record high of 8.9M bpd in June, some analysts pointed out the single-digit growth rate signals a slowdown from the first half of the year. The +6.2% growth rate in September indeed results in a +5% growth in 3Q10, compared with +11% in 2Q11 and +18% in 1Q10. In our opinion, the moderated growth was due to high base effect and situation may continue in the fourth quarter. With China's GDP growth slowing in the second quarter, oil demand may also ease. However, the long-term outlook should remain healthy as China's economy is on track for soft-landing.

 

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Gold Above 1400 on a Call for New Gold Standard ahead of G20

ONG Focus | Insights | Written by Oil N' Gold | Tue Nov 09 10 00:20 ET

Gold's uptrend resumed after a brief pullback a driven by a number of supportive factors. The benchmark contract surged to as high as 1410.4 before settling at 1403.2, up +0.39%. Today in Asia, buying interests remained robust and price was sent to a new record of 1413.3. Robert Zoellick, president of the World Bank, suggested major economies to use a modified gold to stabilize currency markets and the financial system. While the idea will unlikely be put into practice, it put gold under the spotlight. Currency tensions were again the focus ahead of the G-20 summit on November 11/12. Loss of confidence in fiat currencies spurs demand of gold. While pressures on the euro from renewed sovereign crisis in peripheral European economies have also weighed on gold (given the traditional positive correlation between euro and gold), past experience (May/June 2010) told us that intensified worries on sovereign woes would lead to surge in gold price. After initially declined to 85.96, the front-month contract for WTI crude oil rebounded strongly and finished the day at 87.06, up +0.24%. Libya's oil minister said that there's no need for the OPEC to increase output, easing worries about excessive supply.

World Bank president Robert Zoellick wrote in the Financial Times that G20 economies should work on a cooperative monetary system that should 'consider employing gold as a reference point of market expectations about inflation, deflation and future currency values'. Indeed, what Zoellick suggested was a modified version of Bretton Woods gold standard under which the value of the USD was fixed in terms of gold, and other countries held their currencies at fixed exchange rates against USD. When trade deficits occurred, the deficit country financed the deficit with its reserves of international currencies. We do not expect his suggestions will be put into practice. Indeed, the US would not like to see the dollar's status as a reserve currency been replaced. Zoellick's suggestions did help send gold higher. He also pointed out that while many textbooks may treat gold as 'old money', the financial markets are currently using it as an alternative monetary asset. This justified gold's recent rally.

The G20 summit will be held on November 11/12 in South Korea. While the purpose of the meeting is to resolve currency and trade tensions between economies, it helps remind us of intensified disagreements between countries, especially between advanced and emerging markets. The Fed's decision to inject more money to the US financial system has triggered criticism from all over the world. Officials in Germany, China and Brazil all described the move as irresponsible. German Finance Minister Wolfgang Schaeuble said the $600B asset-buying plan is “clueless'. Brazil's central bank president, Henrique Meirelles, said 'excess liquidity' in the US is creating 'risks for everyone'. While Cui Tiankai, china's Vice Foreign Minister said 'many countries are worried about the impact of the policy on their economies'. These criticisms should have no impact on Fed's future monetary policy and it would likely employ more easing measures should the present ones fail to revive the recovery.

Conflicts between economies reflect that it's unlikely for major economic powers to reach a common agreement on currency tensions. This gives gold another boost as investors lose confidence in fiat currencies.

In the currency market, euro's weakness was the most significant as concerns about sovereign crisis in peripheral European economies heightened as indicated in widening in yield spreads. While sentiment in Greece improved mildly after the current government won in the regional election, yields in Irish and Portuguese bonds soared to new highs. In May/June 2010, investors fled to gold for safe haven amid concerns that sovereign crisis in peripheral European economies would hurt the euro and even disintegrate the currency. While we do not believe the problem this time will be as serious as the one occurred half a year ago, the distress may continue boosting gold in the near-term.

 

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Sentiment Sours ahead of US GDP

ONG Focus | Insights | Written by Oil N' Gold | Fri Oct 29 10 07:07 ET

Investors lightened positions ahead of US GDP report and next week's FOMC meeting. Risk aversion dominates the market as the pace of US recovery is not sufficient to reduce unemployment and bring inflation back to a normal level. USD and JPY are being sought. The euro tumbled as sovereign concerns in peripheral European economies remained worrisome. Commodities fall in European session with WTI crude oil price sliding to as low as 81.4 and gold remaining pressured below 1350.

US GDP probably expanded at a +2.2% annualized pace in 3Q10 as driven by growth in consumer spending, business investment and inventory growth. While this would be an improvement from +1.7% in 2Q10, the pace of recovery remains gradual and unsustainable. It's likely that the unemployment rate will stay around 10% for some period with such slow economic growth.

The market has fully priced in new QE measures - large-scale asset purchases- from the Fed next week. Yet, there have been heated debates on the size and time of the program. There are several possibilities that policymakers will choose to begin the program: 1) To buy $500B or more in longer-term Treasury over a period, say 6 months. 2) To buy $100B per month with re-evaluation of the program on every FOMC meeting. There's an implication that the purchase will continue until some sorts of improvement are seen in the economy. 3) To buy $50B or less every month. Ultimately, total purchase would amount to $1-2 trillion in all 3 scenarios. Apart from the asset-buying program, the Fed may adopt new communication strategies in ensuring the market that exceptionally low interest rates will be kept for an extended period. More importantly, the Fed will give a clearer idea on what ‘extended period' mean.

Euro's decline amid sovereign concerns in debt-ridden European economies weighed on gold in the near-term. The woes resurfaced as the Portuguese government failed to approve a debt-consolidation plan. In other peripheral nations, Greek Finance Minister George Papaconstantinou the country has ‘serious tax compliance issues and a review of Greece's 2009 Budget showed the deficit was above +15% of GDP, exceeding previous projections. In Ireland, note holders of Anglo Irish Bank Corp plan to oppose a debt exchange worth 20% of their 1.6B euro of securities. Spreads between peripheral bonds and German bunds widened.

Economic data released in the 16-nation region failed to alter euro's outlook in the near-term. Unemployment rate stayed flat at 10.1% while flash CPI reading rose +1.9% y/y (consensus: +1.7%) in September from +1.8% a month ago.

 

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Sentiment Sours ahead of US GDP

ONG Focus | Insights | Written by Oil N' Gold | Fri Oct 29 10 07:07 ET

Investors lightened positions ahead of US GDP report and next week's FOMC meeting. Risk aversion dominates the market as the pace of US recovery is not sufficient to reduce unemployment and bring inflation back to a normal level. USD and JPY are being sought. The euro tumbled as sovereign concerns in peripheral European economies remained worrisome. Commodities fall in European session with WTI crude oil price sliding to as low as 81.4 and gold remaining pressured below 1350.

US GDP probably expanded at a +2.2% annualized pace in 3Q10 as driven by growth in consumer spending, business investment and inventory growth. While this would be an improvement from +1.7% in 2Q10, the pace of recovery remains gradual and unsustainable. It's likely that the unemployment rate will stay around 10% for some period with such slow economic growth.

The market has fully priced in new QE measures - large-scale asset purchases- from the Fed next week. Yet, there have been heated debates on the size and time of the program. There are several possibilities that policymakers will choose to begin the program: 1) To buy $500B or more in longer-term Treasury over a period, say 6 months. 2) To buy $100B per month with re-evaluation of the program on every FOMC meeting. There's an implication that the purchase will continue until some sorts of improvement are seen in the economy. 3) To buy $50B or less every month. Ultimately, total purchase would amount to $1-2 trillion in all 3 scenarios. Apart from the asset-buying program, the Fed may adopt new communication strategies in ensuring the market that exceptionally low interest rates will be kept for an extended period. More importantly, the Fed will give a clearer idea on what ‘extended period' mean.

Euro's decline amid sovereign concerns in debt-ridden European economies weighed on gold in the near-term. The woes resurfaced as the Portuguese government failed to approve a debt-consolidation plan. In other peripheral nations, Greek Finance Minister George Papaconstantinou the country has ‘serious tax compliance issues and a review of Greece's 2009 Budget showed the deficit was above +15% of GDP, exceeding previous projections. In Ireland, note holders of Anglo Irish Bank Corp plan to oppose a debt exchange worth 20% of their 1.6B euro of securities. Spreads between peripheral bonds and German bunds widened.

Economic data released in the 16-nation region failed to alter euro's outlook in the near-term. Unemployment rate stayed flat at 10.1% while flash CPI reading rose +1.9% y/y (consensus: +1.7%) in September from +1.8% a month ago.

 

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Sentiment Sours ahead of US GDP

ONG Focus | Insights | Written by Oil N' Gold | Fri Oct 29 10 07:07 ET

Investors lightened positions ahead of US GDP report and next week's FOMC meeting. Risk aversion dominates the market as the pace of US recovery is not sufficient to reduce unemployment and bring inflation back to a normal level. USD and JPY are being sought. The euro tumbled as sovereign concerns in peripheral European economies remained worrisome. Commodities fall in European session with WTI crude oil price sliding to as low as 81.4 and gold remaining pressured below 1350.

US GDP probably expanded at a +2.2% annualized pace in 3Q10 as driven by growth in consumer spending, business investment and inventory growth. While this would be an improvement from +1.7% in 2Q10, the pace of recovery remains gradual and unsustainable. It's likely that the unemployment rate will stay around 10% for some period with such slow economic growth.

The market has fully priced in new QE measures - large-scale asset purchases- from the Fed next week. Yet, there have been heated debates on the size and time of the program. There are several possibilities that policymakers will choose to begin the program: 1) To buy $500B or more in longer-term Treasury over a period, say 6 months. 2) To buy $100B per month with re-evaluation of the program on every FOMC meeting. There's an implication that the purchase will continue until some sorts of improvement are seen in the economy. 3) To buy $50B or less every month. Ultimately, total purchase would amount to $1-2 trillion in all 3 scenarios. Apart from the asset-buying program, the Fed may adopt new communication strategies in ensuring the market that exceptionally low interest rates will be kept for an extended period. More importantly, the Fed will give a clearer idea on what ‘extended period' mean.

Euro's decline amid sovereign concerns in debt-ridden European economies weighed on gold in the near-term. The woes resurfaced as the Portuguese government failed to approve a debt-consolidation plan. In other peripheral nations, Greek Finance Minister George Papaconstantinou the country has ‘serious tax compliance issues and a review of Greece's 2009 Budget showed the deficit was above +15% of GDP, exceeding previous projections. In Ireland, note holders of Anglo Irish Bank Corp plan to oppose a debt exchange worth 20% of their 1.6B euro of securities. Spreads between peripheral bonds and German bunds widened.

Economic data released in the 16-nation region failed to alter euro's outlook in the near-term. Unemployment rate stayed flat at 10.1% while flash CPI reading rose +1.9% y/y (consensus: +1.7%) in September from +1.8% a month ago.

 

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Gold Weakens Further as USD Rebounds ahead of G-20 Pledge

ONG Focus | Insights | Written by Oil N' Gold | Fri Oct 22 10 07:25 ET

Gold extended weakness to 1315.6 in European session as the dollar rebounded as G-20 finance ministers meet in South Korea. While the communiqué, which likely focuses on the currency market, should not alter the long-term downtrend of the dollar, it may decelerate the decline in the near-term. After all, the dollar index has slumped more than -12% since June. Investors would probably use any possible reason to take profits from their short-USD positions. Crude oil rebounded above 81 but the near-term outlook remained soft. The market held mixed views on China's oil processing data for September.

The recent rally in commodity prices has mainly driven by weakness in USD. Specifically for gold, while the yellow metal has made new record highs in USD-terms since September, price remains range-bounded in EUR-terms. Therefore, the outlook for USD is crucial for commodities' movements.

USD rebounded as finance ministers from the world's 20 largest economies meet to discuss above currency tensions between industrial and emerging countries. While we do not expect the conflict originated from global economic imbalance will be resolved, the statement released by the ministers may ease the tensions temporarily.

Spoke at an economic forum, Kansas Fed President Thomas Hoenig reiterated his stance against further easing. He said that ‘Monetary policy is about an environment that's supposed to be stable…When you try to use it in a way that floods the market with liquidity, you can in fact get very bad outcomes'. The next event risk for the dollar is the November FOMC meeting. The market has priced in announcement of additional easing measures after the meeting.

Currently trading at 81.2, the front-month contract for WTI crude oil has been fluctuating above 80 over the past few days. China implied oil demand rose +6.2% y/y to around 8.68M bpd. While this is the second largest reading after the record high of 8.9M bpd in June, some analysts pointed out the single-digit growth rate signals a slowdown from the first half of the year. The +6.2% growth rate in September indeed results in a +5% growth in 3Q10, compared with +11% in 2Q11 and +18% in 1Q10. In our opinion, the moderated growth was due to high base effect and situation may continue in the fourth quarter. With China's GDP growth slowing in the second quarter, oil demand may also ease. However, the long-term outlook should remain healthy as China's economy is on track for soft-landing.

 

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Steep Gold Price Increases Ahead - Experts Foresee $2000 Per Ounce

Many investors are realizing that gold and silver now have an upside potential to appreciate that has not been seen since 1980. Similar to the situation of the late 1970's, investors are once again seeing gold coins and bullion as an important hedge against the uncertainly of war, inflation and the potential destruction of wealth due to a shaky dollar. Gold's recent performance is also attracting serious interest from investors because it has outperformed the S&P 500 index for the past five years in a row. Gold and silver prices have moved steadily upward since 2001, as the value of the dollar has weakened. Many experts believe that this is a longer-term rally, which is quite young.

Robert McEwen, chairman and chief executive of a Canada-based gold mining company is very bullish on the future outlook for gold. "I expect it to test $850 by the end of 2008, and by the end of 2010, north of $2,000, possibly $5,000," McEwen stated in a recent interview. Strong gold and commodity prices are spurring investment in the search for new deposits by many mining companies across the world. His company is currently exploring for gold on mineral lands in central Nevada and expects to spend about $50 million to develop the site over the coming years.

Gold is seen as a profitable opportunity by many investors, having risen over 50% during the last two years, from $430 per ounce in May of 2005 to its current spot price of around $660. While McEwen's price projection is considerably above the current spot gold price, he is not the only industry executive who foresees steeply increasing prices in the near future. The former CEO of a large well known US based gold mining company, Pierre Lassonde, believes gold will reach $750 by Christmas of this year. In spite of the price increases in the past several years, actual production of newly mined gold from most nations continues to decline, as costs rise at existing mines.

In spite of the fact that gold prices have been rising toward their May 2006 peak of $725, they have failed to break above the $700 mark this year, and are still seen as consolidating after the sharp run-up in prices last year. In addition, selling of the gold reserves of certain European nations, most notably Spain, is seen as depressing prices in recent weeks. Silver prices have also remained strong.

Many experts believe that although demand from jewelry makers will likely drop off as gold prices rise, it is likely to be more than made up for by increased purchases from investors who are seeking a liquid investment alternative to the dollar. Investment in gold and silver for both large and small investors has been made considerably easier in recent years with the creation of Exchange Traded Funds - funds whose assets are gold or silver held in storage. That expected increase in investment demand, coupled with the declining value of the dollar, rising costs to mine gold and the geopolitical risks around the globe, should tighten the supply and demand picture for the precious metal providing the driving force to move prices upward in the coming years.

The author is an independent investor and not a consultant, advisor or broker. The information and opinions expressed in this article are presented for educational purposes, and are not intended to be used as investment advice. The reader is strongly urged to fully identify and consider all the risks before making any investment.

For more information on the case for investing in gold can be seen at the authors website at: http://nevada-outback-gems.com/gold_invest/investing_gold_case.htm

Chris?s Web page and BLOG on investing in the gold and the stock Market can be viewed here: http://nevada-outback-gems.com/gold_invest/Investing_Gold.htm

Chris Ralph writes on small scale mining and prospecting for the ICMJ Mining Journal. He has a degree in Mining Engineering from the Mackay School of Mines in Reno, and has worked for precious metal mining companies conducting both surface and underground operations. After working in the mining industry, he has continued his interest in mining as an individual prospector. He can be reached at P.O. Box 3104 Reno, Nevada 89505. His information page on prospecting for gold can be viewed at: http://nevada-outback-gems.com/prospect/chris_prospect.htm