Mining stocks continue to get no attention, gold is sliding with more rate hikes now assumed, and school is getting out for summer. I’ve gotta say: It’s a bit tough to remain motivated these days, confesses Gwen Preston, editor of Resource Maven.
Thankfully, I was reminded of a few reasons to care recently. One is that proactive mining execs use quiet periods like this to incubate new deals. I’m excited that we uncovered Targa Exploration before they finance (expected shortly) and then get to work on its unnoticed-until-now lithium assets in Quebec, because I think that deal has explosive potential.
I also think that, even though I don’t have a lot of cash to deploy, I must continue to research stocks as though I do because this summer is a buying opportunity, even if I’m tired of buying opportunities. From that lens I’m interested in stocks with discovery potential, new mines showing strength, new teams taking over mismanaged assets, and good projects with big catalysts pending, as all of those have potential either in a weak market or first when the market turns up.
The longer we go without investor attention on metals, the longer we go lacking sufficient new discoveries and mine builds to meet future demand. Letting time tick by without moving to address those deficits is solidifying and worsening those shortages: Metal supply deficits cannot be quickly rectified when it takes so very long to turn a discovery into a mine.
I think the coiled spring analogy works here – the longer we go without attention on metals, the higher metal prices will go when attention does turn. That bull market will be exciting, profitable, and worth the wait.
As for the macro setup, things have edged towards soft landing recently. We got a slew of strong data points that reinforced expectations the Fed will push rates higher. Stocks can’t decide how to react – the bad of more rate hikes counters the good of a strong economy – but gold got the message, giving up half of its springtime gains.
With a few more months of this ahead – rate hikes keeping gold in check and money moving into the stock market but still no certainty on a soft landing – it’s shaping up to be a boring summer for metals investors.
Doesn’t that just bring my intro full circle – it is a bit hard to stay motivated right now! But I want to assure you that I continue to seek standout stock opportunities and assess the macro scene every day to ensure I see change when it comes.