Continually edited analyst expectations for U.S. economic growth and the tenuous state of Europe have made it difficult to determine the direction of the economy. Investors have been left with ambiguous signals on which to act and there are few options that have the potential to thrive in spite of the state of the economy. Active economic growth in emerging nations is paired against plodding domestic projections and the disparity has inspired considerable volatility within the markets.
Among the safe havens that investors have sought out in the recent confusion is gold. Gold rose 1.5 percent to reach its one month highs Wednesday as bullion gained appeal in light of a decline in the Euro and ongoing uncertainty in the region. Simultaneously the 9.1 annual economic growth in China and the 7-plus percent growth in India have prompted investors to also seek out Copper, which is up 15 percent in recent trading.
Copper, which reached a five-week high in trading today, will continue on an upward trajectory provided the economic growth overseas remains strong. Meanwhile, gold also has the potential to rise alongside worries over a declining dollar, slow growth and domestic debt struggles.
While investors could invest in each of these commodities separately, there is the more streamlined and better insulated option of copper-gold exploration outfits. As a result of their diversification across metals, these companies are able to offer up possibilities regardless of the next turn the economy takes.
Red metal Resource Ltd. (RMES), is among these companies. A mineral exploration outfit with four copper-gold assets in Chile, Red Metal appears to be well-positioned for a range of difference economic paths as well as the global economic growth disparity.
The advantage of copper-gold exploration companies in terms of their economic flexibility can be intensified depending on their region of interest. Chile, for instance remains largely unexplored but rich in metals, positioning it well to thrive as investors seek out metals and drive up demand. The ongoing demand for gold bullion and copper have led to many areas having their resourced depleted. This is not the case with Chile which only recently authorized investment in the nation’s rich mining industry. The delay on permitting mining has positioned Chile well for the current market where metals, especially gold, are pricy and in high demand.
With significant potential for supply and strong demand, exploration companies with ties to producing properties in the region are likely to reap financial benefits that exceed those possible in another economy.
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