A Weekly Recap of All Things Resources to Friday, November 25th

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‘That’s a Wrap’

By Rod Blake

As the brokers, investors and portfolio managers settled in for what is usually a quiet week of trading ahead of U.S Thanksgiving, they could not help but feel somewhat dissatisfied in that the market rally for which they had waited so long had barely lasted for two weeks.

The way I see it – bull markets usually don’t happen with the snap of one’s fingers. The sharp 12% rally like the market experienced a couple of weeks ago are usually the sign of a bear market relief or short covering rally. Long term bull markets usually start gradually against a backdrop of extreme investor negativism, and you don’t really know you’re in one until one looks back and sees how the market has quietly moved higher. Long term gold investors may remember how gold bullion languished for over a year just above US$250 near the turn of the century. Investors were depressed and as such most didn’t really take notice of the emerging new bull market until gold rose above $500 in 2006 – missing the first double of a major move that peaked at about US$1,845 in 2011.

Meanwhile – The S&P/TSX Composite Index has quietly climbed to a new 6-month high of 20,384.

Petroleum service companies seem to be doing as well as the producers as seen by Calfrac Well Services Ltd. ‘CFW-T’ as the Calgary, AB company announced its intention to convert over $47-million in Senior Convertible Notes to common shares and also issued a positive outlook for the rest of 2022.

Crude oil traded down by 4,71% to dip below US$80 to a 2-month low of US$76.39-a-barrell on word that the Group of Seven (G7) nations is proposing paying no more than US$70 for a barrel of Russian oil.

Meanwhile, cooler weather helped the price of natural gas to rise by 14,29% to a new 2-month high of US$7.28/mmbtus.

The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 2-rigs to 784, an increase of 215 from this time last year. Up north – the number of Canadian active rigs fell by 7-rigs to 194, an increase of 23 in the past year.

According to Rho Motion – Passenger car & light-duty electric vehicle (EV) monthly sales exceeded one million for the first time in September 2022, while reaching a total of 6.8 million units YTD.

Denison Mines Corp. ‘DML-T & ‘DNN-A’ announced successful uranium leaching test results from the Phoenix in-situ recovery portion of its Wheeler River uranium project in Saskatchewan’s Athabasca Basin.

Lundin Gold Inc. ‘LUG-T’ stock price surged up by $1.80 or 16.19% to $12.92 after the Vancouver, BC based miner reported exceptional drill hole gold assays including among others – 17.93 g/t Au over 51.45 metres – from its Fruta del Norte gold mine is southeast Ecuador.

The price of Deere & Co. ‘DE-N’ shares shot up by $20.96 or 5.03% to US$437.52 after the giant Moline, IL. based heavy equipment company reported a 3rd-quarter net sales gain of some 40% and also projected improved sales for the rest of the year.

The Canadian markets were very quiet late in the week given that the U.S. markets were closed as Americans celebrated their Thanksgiving and enjoyed football and Black Friday.

For the Week – the DJI was up by 1.78% to 34,347 with the S&P 500 ahead by 1.54% to 4,026 and the NASDAQ better by 0.72% to 11,226. Across the line – the TSX gained 2.02% to 20,384 while the TSX Venture was unchanged at 576. The CBOE Volatility Index or VIX fell by 11.33% to 20.50.

With currencies – the Canadian dollar was up marginally to US$0.7479 while the U.S. dollar ‘DXY’ lost 0.91% to 105.96.

As for commodities Gold bullion gained 0.34% to US$1,756 with silver up by 2.48% to US$21.45 while copper fell by 0.82% to US$3.61, and lithium dropped by 2.69% to US$80,936. Crude oil lost 4.71% to US$76.39 while natural gas gained 6.75% to US$6.80. Lumber fell by 0.94% to US$422 and overall – the CRB Commodities Index was unchanged at 299.

And Finally – Consumers sending Christmas packages may encounter sticker shock this holiday season as Canada Post, UPS and FedEx have sighted high diesel prices in announcing new fuel surcharges of up to some 40%.

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