A Weekly Recap of All Things Resources to Friday, October 18th
‘That’s a Wrap’
By Rod Blake
The back half of the month began with the four major North American equity markets defying the seasonality odds as they remained at or near all-time highs. Those who own index funds continue to make consistent gains without having to make any further investment decisions other than just to hold them. Even the resource investors had some joy in that the price of lithium and by conjecture, lithium stocks, were rising from a very deep hole set just one month ago. Meanwhile, gold bullion, the main driver of the junior resource sector continued to hold lofty levels only a few dollars below an all-time high of US$2,673 set late in September. All of which leaves the usually lowly TSX Venture Exchange at a somewhat lofty 5-month high of 605. If this trend continues – could it be that tax loss selling will be nonexistent this year?
The way I see it – While the Gold Bugs continue their happy dance, they might want to take a look at their silver cousins who seem to have suddenly stopped dancing. You see, as noted above – while gold bullion hovers near all-time highs – the price of silver suddenly fell over 2% last week to US$31.53 and driving the all-important gold/silver ratio back up to 84.27, from 82.44 just one week prior. As mentioned in previous columns – while not a hard rule – a dropping gold/silver is a very good confirmation of a long term bull in precious metals. Hopefully, this rise in the ratio was just a one off, but should the upward trend continue – the Gold Bugs will surely stop dancing as well.
The TSX Venture Exchange began a Thanksgiving Day shortened trading week up some 70-points or 13% from its 2024 low set only one month ago.
Precious metals had a good week with silver finally breaking out and closing at a new 12-year high of US$33.75 a troy ounce (t oz), while gold bullion closed at a new all-time high of US$2,721 a troy ounce (t oz).
Which no doubt helped push Kinross Gold Corp. ‘K-T’ & ‘KGC-N’ to close at a new 13-year high of $14.64 and Agnico Eagle Mines Ltd. ‘AEM-T & N’ to rise to a new all-time closing high of $119.01.
On the silver side – Endeavour Silver Corp. ‘EDR-T’ & ‘EXK-N’ closed at a new 3-month high of $6.60 and MAG Silver Corp. ‘MAG-T & N.A’ reached a new 21/2-year closing high of $23.15.
Copper/gold producer HudBay Minerals Inc. ‘HBM-T & N’ closed at a new 31/2-month high of $13.10.
It is one thing to announce a large $100-million Private Placement financing, but it is quite another to increase the size of the financing by another $75-million to $175-million just one day later. Such was the case for NGEx Minerals Ltd, ‘NGEX-T’ where a large financing was almost doubled due to intense investor interest.
Uranium stocks caught an early week bid on word that Amazon.com, Inc. ‘AMZN-N’ subsidiary AWS was investing US$500-million with Virginia’s Dominion Energy to explore the development of a small nuclear reactor.
This news helped uranium giant Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ to close at a new all-time high of $80.13.
Uranium developer Fission Uranium Corp. ‘FCU-T’ rose to a new 3-month closing high of $1.18, while Denison Mines Corp. ‘DML-T’ &’ DNN-N.A’ closed at a new 31/2-month high of $3.27, and NexGen Energy Ltd. ‘NXE-T & N’ to rose to close at a new 51/2-month high of $11.49.
Lithium Americas Corp. ‘LAC-T & N’ shares’ surged up by $0.82 or 22.16% to close at a new 41/2-month high of $4.52, after the company announced that General Motors Holdings LLC (GM-N) had recommitted to a US$625-million investment package to help develop LAC’s Thacker Pass Lithium Project in Humboldt County, Nevada.
This as General Motors Co. ‘GM-N’ reported a 60% increase in 3rd-quarter 2024 electric vehicle (EV) sales from one year ago to a record 32,095 units.
Century Lithium Corp. ‘LCE-V’ shares’ rose to close at a new 5-month high of $0.42.
The influential Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 1-rig in the past week to 585, down by 39-rigs from this time last year. Across the line – the number of Canadian active rigs fell by 2-rigs to 217, up by 19-rigs from one year ago. Â
Interest rate sensitive pipeline issues continued their bull run with Enbridge Inc. ‘ENB-T & N’ and TC Energy Corp. ‘TRP-T & N’ closing at respective new 21/3-year highs of $57.97 and $66.42, while Pembina Pipeline Corp. ‘PPL-T & N’ closed at a new all-time high of $59.82.
Infrastructure company Aecon Group Inc. ‘ARE-T’ rose to a new 17-year closing high of $22.90.
Silver and gold bullion were the strongest commodities during the week while crude oil and natural gas were the weakest,
The Canadian dollar fell to 21/2-month low of US$0.7244.
The U.S. dollar Index or ‘DXY’ rose to a new 21/2-month high of 103.47.
The North American equity markets finished the week on a strong note with the NASDAQ Exchange closing at a new 3-month high of 18,490, and the TSX Venture Exchange reached a new 5-month closing high of 622. Meanwhile, the TSX Composite, S&P 500 and Dow 30 indexes all rode to respective new all-time closing highs of 24,823, 5,865 and 43,276.
For the Week – the DJI gained 0.96% to 43,276, with the S&P 500 up 0.81% to 5,865, and the NASDAQ rose 0.80% to 18,490. In Canada – the TSX rose 1.44% to 24,823 and the TSX Venture gained 2.81% to 622. The CBOE Volatility Index or VIX dropped 11.88% to 18.03.
With currencies – the Canadian dollar fell 0.30% to US$0.7244, while the U.S. dollar ‘DXY’ rose 0.53% to 103.47.Â
With commodities – gold bullion gained 2.41% to US$2,721, and silver rose 7.04% to US$33.75, as copper fell 2.25% to US$4.55, and lithium lost 5.90% to US$10,185. Crude oil fell 8.20% to US$69.31, as natural gas dropped 14.45% to US$2.25, and uranium lost 0.24% to US$83.30. With soft commodities – lumber gained 0.19% to US$527. Overall – the CRB Commodities Index fell 3.76% to 333.