A Weekly Recap of All Things Resources to Friday, June 21st

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‘That’s a Wrap’

By Rod Blake

As the brokers, investors, portfolio managers and traders signed off last Friday afternoon (TaW – 6/14th), it was clear to all that the artificial intelligence (AI) weighted S&P 500 and NASDAQ Exchanges were continuing to power ahead at the expense of the rest of the North American markets that are more aligned with conventional economics such as unemployment, inflation and currency values, and financials.

The way I see it – Watching the North American markets last week reminded me of watching a baseball game where one team, made up of the Dow 30, TSX Composite and TSX Venture, is playing a good fundamental game of pitching, defence and hitting for singles, while their AI heavyweight S&P 500 and NASDAQ opponents just swing away and hit home run after home run. Now, while good fundamentals usually win the investment pennant in the long run, in the short term, it is hard to beat an opponent who attracts so much investor attention and hits home run high after home run highs. History tells us that fundamentals will once again prevail. It just might not be today.

The AI enthusiasm once again carried over to the new week with the S&P 500 and NASDAQ closing at respective new highs of 5,487 and 17,862.

Early last week, I mentioned how commodities do not like a strong U.S. dollar, which is the norm. Imagine my surprise as I summarized the markets later on Friday, June 14th and I saw that four key commodities I follow – gold (+1.70%), silver (+1.34% ), copper (+0.22%), and crude oil (+4.13%) were all up on a week where the U.S greenback was also up (0.55%). This could be a one-off event, or an indication that money is coming into these key commodities at a greater rate than it is going towards the world’s reserve currency. A continuation of the latter could signal a major bull market for commodities.

Reunion Gold Corp. ‘RGD-V’ closed at a new 12-year high of $0.68.

B2Gold Corporation ‘BTO-T & ‘BTG-N.A’ released a positive Preliminary Economic Assessment (PEA) on its 100% owned Gramalote gold project in Colombia, as well as an initial Inferred Mineral Resource Estimate for the Springbok Zone on the company’s Antelope deposit near its Otjikoto Gold Mine in Namibia.

Similarly – Agnico Eagle Mines Ltd. ‘AEM-T & N’ shares’ rose by $1.77 or 2.00% to close at $90.43 after the Toronto, ON based miner released an updated mineral reserve and mineral resource estimate (MRMR) on the company’s Detour Lake Gold Mine that will now see Detour produce about 1-million ounces of gold per year for 14-years, starting in 2030.

Taseko Mines Ltd. ‘TKO-T’ & TGB-N.A’ stock rose by $0.20 or 6.23% to $3.41 after the Vancouver, BC based copper miner announced a tentative labour agreement with the unionized workforce at the company’s Gibraltar mine near Williams Lake, BC.

This as the price of copper fell to a new 2-month closing low of US$4.43 a pound.

While nickel dropped to a new 3-month closing low of US$7.82 a pound (lb).

This as Brazilian mining giant Vale S.A. ‘VALE-N’ announced a 4-year, US $3.3-billion budget to boost nickel and copper and nickel production from the company’s operations in Brazil and Canada.

Lithium closed at a new 3-year low of US$12,826 a tonne (t).

Which no doubt influenced investors to drive the closing stock price of Patriot Battery Metals Inc. ‘PMET-T’ to a new 11/2-year low of $5.23 and lithium giant Albemarle Corporation ‘ALB-N’ down to a new 31/2-year low of US$93.79.

Sometimes a company’s management feels they have advanced their company as far as they can and then publically seeks out other opportunities for advancement. As such – Neo Performance Materials Inc. ‘NEO-T’ shares’ rose by $0.94 or 12.74% to $8.32 after the Toronto, ON based specialty metals company announced it will search out other strategic opportunities to maximize shareholder value.

The share price of west coast giant coal exporter Westshore Terminals Investment Corp. ‘WTE-T’ fell to a new 21/2-year closing low of $22.32.

With a sign of the amount of money coming into the artificial intelligence (IA) space – Waabi – a Toronto, ON based company pioneering generative AI for the physical world – raised US$250-million from an influential group of AI investors including industry giant NVIDIA Corporation ‘NVDA-N’, that will see the company producing fully driverless, generative AI-powered autonomous trucks in 2025.

Forestry equities continued to stumble as the stock price of Weyerhaeuser Co. ‘WY-N’ fell to a new 8-month closing low of US$28.64, while Cascades Inc. ‘CAS-T’ closed at a new 11/2-year low of $8.98, Interfor Corporation ‘IFP-T’ fell to a new 31/2-year closing low of $16.20, and Western Forest Products ‘WEF-T’ dropped to a new 141/2-year closing low of $0.46.

This as the price of lumber fell to a new 14-month closing low of US$453 per 1,000 board feet (mbf).

The industry standard Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 2-rigs in the past week at 588, down by 94-rigs from this time last year. Across the line – the number of Canadian active rigs was up by 6-rigs to 166, down by 3-rigs from one year ago.  

Crude oil was the only resources higher for the week, while silver was flat. Lumber and natural gas led resources lower.

The Dow 30 and S&P 500 were up on the week while the NASDAQ was unchanged. Meanwhile, the two Canadian markets were down.

For the Week – the DJI gained 1.45% to 39,150, and the S&P 500 rose 0.61% to 5,465 while the NASDAQ was flat at 17,689. Up north – the TSX lost 0.39% to 21,555 and the TSX Venture fell 0.52% to 571. The CBOE Volatility Index or VIX rose 4.27% to 13.20.

With currencies – the Canadian dollar gained 0.30% to US$0.7303, and the U.S. dollar ‘DXY’ rose 0.29% to 105.83. 

With commodities – gold bullion lost 0.43% to US$2,322 while silver was flat at US$29.55, as copper fell 1.56% to US$4.43, and lithium lost 4.36% to US$12,826. Crude oil gained 2.68% to US$80.59, while natural gas lost 5.88% to US$2.72, and uranium fell 1.10% to US$85.05. With soft commodities – lumber fell 8.67% to US$453. Overall – the CRB Commodities Index was unchanged at 346.

And Finally – Summer is a time to take a break, and as such I will be heading east for a couple of weeks to see spend time with family and friends in Swift Current, Saskatchewan. If all goes as planned, this column will wrap the week of July 12th.

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