What is Going to Happen to Iron Ore and Gold Prices: Jonathan Barratt

Iron Ore prices have been declining and Jonathan Barratt, the Chief Investment Officer at Ayers Alliance Securities, said in a recent intervention on CNBC that this commodity might be going through a “destocking stage.” and any “rally will be sold.” This decline might be caused by the excess in the production of Iron Ore, for example, Mr. Barratt pointed out that Australian Iron Ore mines are delivering record outputs of the metal.

At the same time, the decline in iron ore prices might affect the stock price of companies engaged in its production. As Mr. Barratt pointed out, the lower is the price for iron ore, the lower is the margin set by these companies, and in this way, they are under more pressure with the decline of the commodity prices.

Australian stocks engaged in iron ore production such as Atlas Iron Limited (ASX:AGO) or Fortescue Metals Group Limited (ASX:FMG) are declining, these two stocks already loosing around 40% and 20% since the beginning of the year respectively. Mr. Barratt states that iron ore producers are delivering high outputs while they still can attract buyers, but it might be in their detriment that they do that, because, apparently, there are too many suppliers.

Gold is another commodity that has lost around 10% over the past year. However, the price for gold has gained some ground this week on the back of an European Central Bank meeting and a nonfarm payroll report. “Gold has no friends at the moment. Hopefully it will get some support around this 1240 level,” Mr. Barratt said. At the same time, the CIO of Ayers Alliance Securities considers that gold prices are controlled more by other precious metals, such as platinum and palladium, rather than the ECB and the nonfarm payrolls. A big impact will also come from the situations in South Africa and Russia, which are two of the largest producers of platinum and palladium.

Watch the full video below:

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!