The Weekly Dig
Haywood Mining Team
Crunch Time for Commodities/Mining Equities as PDAC Approaches
§ The rally in metal prices and mining equities continued unabated this week. However, while precious metals, particularly gold (↑2.8%; $1,262 per ounce this week), have risen on the back on global economic uncertainty, especially in the U.S., the recent rise in base metals has taken many investors by surprise. Testing the $2.00 per pound level a little less than a month ago, the price of copper has since risen by 12%. This week alone, copper is up 6.4%, while nickel (↑9.1%), lead (↑6.78%) and zinc (↑5.24%) have each risen significantly this week, with nickel rocketing past the $4.00 per pound level to finish at $4.23 per pound. While the rise in gold can be attributed to investors seeking safe-haven assets following the fall in global stock markets worldwide, the rise in base metals is not so easily explained; concerns over global economic growth, particularly in China, would imply significant downward pressure on base and industrial metal prices, certainly copper, or Dr. Copper as it is affectionately known (at least in a bull market) has historically been viewed as the bellwether for global growth. Some view this counterintuitive move as a reflection of the opaque nature of China’s economy, and that perhaps growth in the Country is not as significant as first thought. Regardless of the reasons, however, many view the timing of the PDAC, and the performance of metals and mining equities syn- and post- the world’s largest mining conference as a reliable indicator for what is in store for the summer. This view is borne from the performance of metals and equities during the same period since 2011, with initial positive signs giving way to a subsequent downturn in metal/equity prices at and around the PDAC. Silver (↑5%), platinum (↑6.6%) and palladium (↑13%) also finished up, closing at $15.55, $979 and $556 per ounce respectively. Meanwhile, WTI crude prices also rose during the week, finishing at $36.23 per barrel, while the UxC Broker Average Price (BAP) of uranium fell below $32.00 per pound, finishing at $31.38 per pound on Friday.
This report may be distributed in the following states: nil. Otherwise, this report may only be distributed into those states with an institutional buyer state securities registration exemption.
Keine Kommentare:
Kommentar veröffentlichen