A Weekly Recap of All Things Resources to Friday, March 22nd

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‘That’s a Wrap’

 By Rod Blake

On reviewing last week’s market activity, one stat stood out amongst all the rest. The U.S. major markets seem to be consolidating, topping or even retreating from their recent highs, the TSX Composite was the only major North American Index to etch out a gain (0.51%) last week and seems poised to test its recent 2-year closing high of 21,970.

The way I see it – There is usually only one reason that the TSX outperforms its American counterparts – positive or rising resource prices. Let’s take a closer look:

– Uranium started the current resource rally about this time last year at about US$50 and more than doubled to a New Year high of US$106, is holding most of those gains.

– Silver ended the week at 31/2-month high of US$25.20 and is up 11.50% so far this year from a low of US$22.60 in early February.

– Gold set a new record high of US$2,183 last week and is up 8.18% this year from its recent low of US$2,018 in late January.

– Copper closed the week at a new 11-month high of US$4.11. The red metal is up 11.38% from a recent low of US$3.69 set in mid February.

– Lithium, which perplexed investors by declining for most of 2023 just reached a 31/2-month high of US$16,167 and up 22.20% from a low of US$13,230 set in late January. Granted, from a deeply oversold position.

– And crude oil just set a new 41/2-month closing high of US$81.26 and is up by almost 14% from an early January low of US$71.32.

Six minerals or resources that are trading at or near multi-month, multi-year or all-time highs. Little wonder investors are starting to look north of the border.

Copper stocks continued to attract investor attention with the closing share price of Taseko Mines Ltd. ‘TKO-T’ & ‘TGB-N.A’ and Hudbay Minerls Inc. ‘HBM-T & N’ rising to respective new 2-year closing highs of $2.75 and $9.39.

Lumber rose to a new 11/2-year high of US$609 a thousand board feet (mbf).

And Vancouver, BC based Doman Building Materials Group Ltd. ‘DBM-T’ shares’ rose to a new 2-year closing high of $8.56.

Crude oil’s advance carried on early into the week as the black gold rose to a new 5-month high of US$83.33 per barrel (/bbl).

Which no doubt helped Canadian petroleum giant Canadian Natural Resources ‘CNQ-T & N’ stock to close at a new all-time high of $100.79.

China’s Sinochem Group gets the distinction of purchasing the first 550,000 barrels of oil to flow through the soon to be completed Trans Mountain expansion. The crude will be supplied by Calgary, AB based Suncor Energy Inc. ‘SU-T & N’.

This as the closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 5-rigs in the past week to 624, down by 134-rigs from this time last year. Across the line – the number of Canadian active rigs fell by 38-rigs to 169, up by 4-rigs from one year ago.

Iron ore continued to under pressure and fell to a new 7-month low of US$102.50 a tonne.

Silver continued under accumulation, rising to a new 10-month closing high of US$25.56 a troy ounce (t oz).

Which no doubt helped the price of Fortuna Silver Mines Inc. ‘FVI-T’ & ‘FSM-N’ to rise to a new 2-month closing high of $4.75.

Similarly, just one month after establishing a new 8-year low and the price of IMPACT Silver Corp. ‘IPT-V’ stock rose to close at a new 3-month high of $0.205.

Gold bullion rallied to close at a new all-time high of US$2,186 a t oz.

And Eldorado Gold Corp. ‘ELD-T’ & ‘EGO-N rose to a new 16-month closing high of $18.24.

The British Columbia government pledged $30-million this year to expand the province’s “electric highway” by adding another 500 electric vehicle (EV) charging stations to the already 5,000 available across the province.

The CRB Commodities Index rose to a new 13/4-year high of 332.

The TSX Composite Index rose to a new al-time closing high of 22,087, while to the south, the S&P 500, Dow 30 and NASDAQ all reached respective new all-time high closes of 5,242, 39,781 and 16,429.

Lumber and gold were the strongest commodities on the week, while uranium and copper were the weakest.

Most commodities fell late in the week against a very strong U.S. dollar.

All five of the North American indexes were in the black going into the weekend

For the Week – the DJI gained 1.97% to 39,476, as the S&P 500 rose 2.29% to 5,234, and the NASDAQ gained 2.85% to 16,429. Up norththe TSX gained 0.62% to 21,984 and the TSX Venture rose 0.18% to 552. The CBOE Volatility Index or VIX fell 9.31% to 13.06.

With currencies – the Canadian dollar lost 0.45% to US$0.7350, while the U.S. dollar ‘DXY’ gained 0.94% to 104.43.

With commodities – gold bullion gained 0.32% to US$2,165, as silver lost 2.14%% to US$24.66, while copper fell 2.43% to US$4.01, and lithium dropped 1.81% to US$15,875. Crude oil fell 0.53% to US$80.63, as natural lost 1.19% to US$1.68, and uranium dropped 6.59% to US$85.00. With soft commodities – lumber rose 9.37% to US$607. Overall – the CRB Commodities Index gained 1.22% to 331.

One Last Thought – Investors surging into the current artificial intelligence (AI) induced growth market may be ignoring the importance of dividends at their peril,  as data from the U.S stock market shows that over the past 123-years – an average non-dividend paying stock will have increased in value by about 35-times, while a dollar put into a dividend reinvestment stock would have grown by some 2,024 times in value.

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