The Weekly Dig
Mick Carew, PhD, mcarew@haywood.com
Haywood Mining Team
Commodity Prices and Equities Remain Buoyant Post PDAC
§ It appears, at least for the time being, that commodity prices have remained buoyant throughout and beyond the Prospectors and Developers Association of Canada (PDAC) conference in Toronto this week. As reported last week, the past three years have seen a similar surge in metal prices and equities at the start of the year, only to fall in time for the world’s largest mining conference. While attendances were down on previous years (~22,000 compared to 23,500 last year) the mood was clearly more positive as both precious and base/industrial metals maintained their early-year levels. While the jury is still out on whether the rise in base and industrial metals prices can be sustained, it appears investors are more confident that precious metal prices, particularly gold, bottomed with gold finding support at the $1,200 per ounce level. In fact the price of gold again hit a 52-week high on Friday, hitting $1,284 per ounce during intra-day trading before settling at $1,251 per ounce (↓0.7%). Palladium (↑3.4%) was up this week, finishing at $575 per ounce, while platinum and silver both fell, finishing at $962 and $15.51 per ounce respectively. Base metals were mostly down after last week’s spectacular rise; copper (↓1%), nickel (↓6%), lead (↓1.1%) and zinc (↓3%) each finishing at $2.24, $3.99, $0.84 and $0.82 per pound respectively, while the iron ore spot price rocketed up past the $60 per tonne level on Tuesday before settling at $55 per tonne on Friday. WTI prices continued to rise steadily this week, with more commentators suggesting a bottom in oil prices had been reached despite continued global oversupply, approaching the $40 per barrel level for the first time since July last year. Finally, uranium prices were an anomaly in an otherwise bullish commodities sector, with the UxC Broker Average Price (BAP) falling below the $30 per pound level for the first time since August 2014, finishing at $28.50 per pound, despite positive news out of China Friday regarding its intention to continue building its strategic reserves.
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