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

‘That’s a Wrap’

By Rod Blake

As the brokers, investors, traders and portfolio managers prepared for another week of October market action, some were content in let this bull market continues to take the value of their holding higher. Others, noticing a rotation in leadership taking place, were scrambling to educate themselves on the value of precious metals and precious metals issues, as this sector continued to outperform.

The way I see it – Not only are gold and silver issues outperforming, but the investment interest is now filtering down from the senior to more junior issues. Case in point – The TSX Venture Exchange – the index that houses most of the junior mining issues – begins the week up some 17^% from its August low and looks poised on taking a run at the previous year to date high of 622 set in late May. Should it break through the next level of resistance is near the 645 high set over 1^1/2-years ago. Trading volumes on the Venture are also increasing with the junior exchange trading over 45-million shares last Friday. This increased volume will be needed for the Venture to take a run at the April 2023 high. I’ve said it before that bull markets usually start quietly and can go unnoticed for quite some time. It will be interesting to see what happens if the 645 level is breeched.

Gold bullion closed at a new all-time high of US$2,747a troy ounce (t oz).

All of which gave gold equities a lift as –

B2Gold Corporation ‘BTO-T’ & ‘N.A’ closed at a new 1^1/4-year high of $4.78 and

Agnico Eagle Mines Ltd. ‘AEM-T & N’ closed at a new all-time high of $122.65.

Silver reached a new 13-year closing high of US$34.79 a troy ounce (t oz).

And silver issues caught a bid and –

Impact Silver Corp. ‘IPT-V’ rose to a new 6-month closing high of $0.32 as –

Pan American Silver Corp. ‘PAA-T & N’ rose to a new 2^1/2-year closing high of $35.75.

The all-important gold/silver ratio dropped to 79.

The US Dollar Index or ‘DXY’ climbed to a new 3-month closing high of 104.43.

The Canadian Loonie fell to close at a new 3-month low of US$0.7195.

Mining is much more than just taking ore from the ground and most mining companies become integral members of their communities. Case in point – Sherritt International Corp. ‘S-T’ shared electrical power from the company’s Moa Nickel mine in Cuba to help that Caribbean country re-establish its national grid operations following recent hurricanes.

Teck Resources Ltd. ‘TECK.B-T’ & ‘TECK-N’ stock fell by $2.38 or 3.59^% to $66.30 after Canada’s largest miner failed to impress the street with the company’s 3^rd-quarter update.

The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs was unchanged in the past week at 585, down by 40-rigs from this time last year. Up north – the number of Canadian active rigs fell by 1-rigs to 216, up by 20-rigs from one year ago.  

Natural gas and crude oil were the commodities with the largest percentage gains during the week while lithium and uranium had the largest percentage loss,

The TSX Venture Exchange rose to a new 1^1/3-year closing high of 627.

The North American equity markets were mixed going into the weekend.

For the Week – the DJI lost 2.69^% to 42,114, with the S&P 500 off 0.97^% to 5,808, while the NASDAQ rose 0.16^% to 18,519. Up north – the TSX fell 1.45^% to 24,464 and the TSX Venture lost 0.32^% to 620. The CBOE Volatility Index or VIX rose 12.69^% to 20.33.

With currencies – the Canadian dollar fell 0.68^% to US$0.7195, while the U.S. dollar ‘DXY’ rose 0.82^% to 104.33. 

With commodities – gold bullion gained 0.88^% to US$2,745, while silver fell 0.27^% to US$33.66, as copper lost 0.46^% to US$4.33, and lithium lost 1.60^% to US$10,022. Crude oil gained 3.33^% to US$71.62, and natural gas rose 12.44^% to US$2.53, while uranium lost 1.56^% to US$82.00. With soft commodities – lumber gained 0.57^% to US$530. Overall – the CRB Commodities Index rose 1.20^% to 337.