A Weekly Recap of All Things Resources to Friday, May 19th
‘That’s a Wrap’
By Rod Blake
The new trading week began with the ‘Goldbugs’ quietly muttering under their breath because once again, the price of their favourite metal had – on a second attempt in just over a year – come close at US$2,050 but like before – failed to take out the old all-time high of US$2,075. And now with a rising U.S dollar the world’s true currency looked to be drifting lower back towards US$2,000.
The way I see it – From my perspective in the markets it seemed that gold had two bull seasons in any given year. The first was usually minor bull came early in a New Year as new money came into the market and buying for the Chinese New Year jump started the 1st-quarter. The second and usually stronger positive season was typically in late summer as jewelers bought ahead of Christmas and Indian’s buying for their wedding season created a second lift for gold. Of course there are variables and no two years are never exactly the same, but the two positive seasons does tend to repeat. So if this New Year season is done the Goldbugs may be waiting a few months for another and perhaps better shot at achieving that new all-time high for gold. After all – the current all-time high of US$2,075 took place in August of 2020.
Three months after first being courted with a non-binding takeover bid from the world’s largest gold producer and Newcrest Mining Ltd. ‘NCM-T & A’ finally agreed to a revised stock and dividend deal from Newmont Corporation ‘NEM-N’ & ‘NGT-T’ valued at some US$19.2-billion.
Centerra Gold Inc. ‘CG-T’ & ‘CGAU-N’ shares’ fell by $1.63 or 18.13% to $7.36 after the Toronto, ON based miner’s 1st-quarter financials failed to live up to the street’s expectations.
This as the price of gold bullion falls below the psychologically important US$2,000 level to a 2-month low of US$1,954 a troy ounce.
The price of Arizona Sonoran Copper Company Inc. ‘ASCU-T’ stock rose by $0.14 or 8.43% to $1.80 after the Toronto, ON based mineral developer announced the company had received the important Industrial Air Permit for its Cactus Copper Mine Project in Pinal County, AZ.
Minto Metals Corp. ‘MNTO-V’ announced the struggling copper miner was ceasing all operations at the Minto Mine in central Yukon and that the company’s board of directors had resigned.
This as the price of copper fell to a new 51/2-month low of US$3.64 a pound.
The price of crude oil got a lift on word the U.S. Department of Energy (DOE) will purchase up to 3-million barrels of oil for the country’s Strategic Petroleum Reserve (SPR). This would seem to be a good deal for America as the $70/bbl oil the DOE buys back today was sold for about US$95 in 2022.
Crescent Point Energy Corp. ‘CPG-T & N’, Athabasca Oil Corporation ‘ATH-T’ among other petroleum companies – shut in some of their Northern Alberta and North-East British Columbia facilities due to the ongoing wildfires that continue to ravage the region.
The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 11-rigs over the past week to 720, down by 8 from this time last year. Up north – the number of Canadian active rigs dropped by 9, a loss of 3 in the past year.
European auto giant Stellantis N.V. ‘STLA-N’ and South Korean battery maker LG Energy Solution announced the partners were halting construction of their $5-billion electric vehicle (EV) battery plant in Windsor, Ontario due to the federal government not delivering on undisclosed promises.
Meanwhile, another South Korean company, SK Ecoplant Co. committed to invest US$50-million to acquire a 20% interest in the World Energy Nujio’qonik green hydrogen project planned for the Port au Port peninsula off Newfoundland’s west coast. The project plans to use the power from some 164 off-shore wind turbines to produce hydrogen for export by 2026.
Kelowna, BC based very junior but very aggressive mineral explorer Enertopia Corporation ‘ENRT-C’ released another round of encouraging lithium drill hole assays from the company’s WT Project near Tonopah, NV.
The markets were mixed going into the weekend on concerns that this critical round of U.S debt ceiling negotiations may lead to a stalemate.
For the Week – the DJI gained 0.38% to 33,427 with the S&P 500 up by 1.82% to 4,199 and the NASDAQ ahead by 3.07% to 12,658. Across the line – the TSX lost 0.34% to 20,351 and the TSX Venture dropped 0.81% to 613. The CBOE Volatility Index or VIX fell by 1.29% to 16.81.
With currencies – the Canadian dollar gained 1.17% to US$0.7409 and the U.S. dollar ‘DXY’ gained 0.92% to 103.20.
With commodities – gold bullion lost 2.13% to US$1,977, as silver fell by 1.12% to US$23.83, while copper improved by 0.27% to US$3.72, and lithium rose by 6.36% to US$32,389. Crude oil gained 0.07% to US$71.55 and natural gas rose by 17.73% to US$2.59, while uranium was unchanged at US$53.40. With soft commodities – lumber fell by 0.29% to US$344. Overall – the CRB Commodities Index gained 1.75% to 290.
And Finally – The Mariners Church in Detroit, known for ringing its bells 29-times in November, 1975 for the lost mariners of the lake ship Edmund Fitzgerald, recently rang them 30-times in recognition of the death and to honour Gordon Lightfoot, the author of the haunting “The Wreck of the Edmund Fitzgerald”.