Categories: General Market Commentary
Topics: General Market Commentary

Copper and lithium with coffee

Hey everybody,

It's your Resource Stock Digest editor Gerardo Del Real here with some Monday morning thoughts on what I'm watching for this week.

I think this week is going to be one of the more interesting ones in the lithium space, which, if I'm correct, appears to have bottomed. All of the lithium names were up double digits this past week and a half.

There are a number of diverse catalysts lining up in the lithium space. You had the Chinese Lunar New Year, which looks to have been a pretty material event as I think China is going to be buying into the market as opposed to selling, which should be a net positive for the lithium spot price.

We're also seeing a combination of lithium mines that were supposed to come online and factor into supply suddenly being shuttered, delayed, or just put on care and maintenance as the sector recovers. So the old adage that the cure for low prices is low prices is very much in play.

The last thing I'm looking at — and this may be another catalyst that I think lights the sector on fire again — is the potential for Australian billionaire Gina Rinehart to come in and finally take the remaining 80% interest in Liontown Resources, which, as you know, she already accumulated a 19.9% interest.

There was a four-month hold where she could not come in and take over the rest of the company. I don't think it's a coincidence that Liontown is up pretty significantly over the past week or so. 

So… a pretty important week for lithium, and we’ll see if indeed the bottom is in. And we’ll also see if the lithium equities continue to rally, which, given the last seven or eight months in the space, a rally to the upside could be pretty substantial. Definitely looking forward to seeing updates from some of the top lithium names in the space here soon.

I'll also be watching gold, which, last week, briefly dipped below the US$2,000 level. It's currently back above US$2,020 per ounce. It held that US$2,000 level beautifully despite a dollar index that, at last peek this morning, is up above the 104 level.

Silver continues to trade as an industrial metal… so it’s not quite go-time for silver just yet. Silver’s day will indeed come and come soon… and I’m seeing the same thing for copper. Copper has had a nice rebound here recently from the US$3.50/lb level to currently slightly above US$3.75/lb. I’m anticipating big things in the copper space for the second half of the year. Stay tuned there! 

We’ve got some great interviews lined up for this week where we'll be talking with a number of CEOs from the gold and lithium space — as well as some other key metals.  

Let's get it!