A Weekly Recap of All Things Resources to Friday, September 9th

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‘That’s a Wrap’

By Rod Blake

After suffering through a mostly negative year to date, the brokers, investors, traders and portfolio managers settled in for the Labour Day shortened first week of September – most were preparing for another rough month ahead in that according to money.com and others – September was traditionally the worst performing weeks of the year.

The price of silver recently set a new 2-year low of about US$17.65-an-ounce. This trend is significant in that it is widely believed that a true precious metals bull market requires silver to outperform gold. So far on the year – gold is down about 4.6% to about US$1,712-an-ounce – while the price of silver is off by about 24.4% to just US$18.06-an-ounce. It would seem that long suffering bullion bulls may have a while to wait.

OPEC+ including Russia – in an effort to steady prices – jointly announced a 100,000 barrel per day crude oil production cut beginning in October.

And as if on cue – crude oil drops by $4.96 or 5.63% to a 9-month low of US$82.02/bbl

The way I see it – Just like Rodney Dangerfield – petroleum companies get no respect. Natural Resources Canada recently reported that the average price of a litre of gasoline has dropped to a 6-month low of $1.61-a-litre – well down from the $2.15 average peak reached in early June. But where was the praise for the petroleum companies on this great news? Why do petroleum companies get criticised for price gouging and price fixing when gasoline prices rise yet they receive little if any praise when gasoline prices fall?

Eldorado Gold Corp. ‘ELD-T’ share price rose by $0.43 or 5.96% to $7.65 after the Canadian based miner announced it had entered into an agreement with a consortium of Greek banks for a €680-million project financing to bring its prized Skouries Gold/Copper Project in Northern Greece to production.

The price of New Gold Inc. ‘NGD-T & N’ stock surged up by $0.06 or 7.32% to $0.88 after the Kamloops based miner released high-grade gold/copper drill hole assays from the East Extension underground orebody. (Fun fact – Your humble scribe ran the 1972 percussion drill program that discovered the original Afton Mine.)

Equinox Gold Corp. ‘EQX-T & N’ shares’ fell by $0.16 or 3.47% to $4.45 after the company temporarily suspended operations at its flagship Los Filos Gold Mine in Mexico due to an illegal blockade by members of the local Mezcala community.

A recent report by Benchmark Mineral Intelligence estimates that without recycling – the world will need more than 300 new mines by 2035 if raw material supply of cobalt, copper, graphite, lithium, and nickel is to keep up with demand for lithium-ion batteries.

For the Week – The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 1-rig to 759, an increase of 256 from this time last year. Up north – the number of active Canadian rigs dropped by 3-rigs to 205, an increase of 62 in the past year.

The DJI gained 2.66% to 32,152 with the S&P 500 up by 3.64% to 4,067 and the NASDAQ ahead by 4.14% to 12,112. In Canada – the TSX rose by 2.60% to 19,773 and the TSX Venture gained 2.22% to 646.

Gold bullion gained 0.23% to US$1,716, with silver up by 4.10% to US$18.80 and copper ahead by  4.71% to US$3.56. With petroleum – crude oil fell by 1.00% to US$86.25 and natural gas lost 0.97% to US$8.04. The Canadian dollar rose by 0.07% to 0.7678.  Overall – the CRB Commodities Index was unchanged at 305.

And Finally California, the environmentally leading state that recently dictated that no new gasoline vehicle sales will by allowed as of 2035 – has just asked electric vehicle (EV) owners to refrain from charging up their cars as the states electrical grid is on the verge of collapse.

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