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This was the first full week of trading in 2024 and we certainly hope that this will be a good year for everybody.
North American stock markets had a bit of a rough start to the year but coming off an eight-week runup at the end of 2023 it was not so surprising that some profit-taking, and reallocation, occurred as the calendar page turned. Markets dipped on Thursday after U.S. CPI numbers were released but have recovered much of that this morning. Thursday’s CPI report showed that overall prices rose 0.3 percent from November and 3.4 percent from 12 months earlier. Those gains exceeded the previous 0.1 percent monthly rise and the 3.1 percent annual inflation in November, as higher rents and food prices boosted overall U.S. inflation. This pushed back against the optimistic expectations of rate cuts coming sooner that had been priced in. Sticky inflation leads to “higher for longer”.
The U.S. dollar index (DXY) jumped higher on the CPI news, reaching a level last seen in mid-December 2023.
Precious metals reacted accordingly with gold falling to $2,025/oz before recovering to $2,050/oz today, and silver fell to $22.60/oz before recovering to $23.30/oz today.
Base metal prices ended last year on the upswing but have traded lower in the early sessions this year, with copper prices at $3.78/lb. Prices were all down significantly from the start of 2023. Many pundits are looking for copper to outperform this year, as supply seems strained, and Barrick Gold is rumoured to be building a larger footprint in copper output. Nickel has performed terribly – down 50% from January 2023. Agnico Eagle Mines Limited’s recent $23 million investment into Canada Nickel Company Inc, to acquire about 12%, is quite interesting as Agnico is not in that business and may indicate their positive view on the metal.
Battery metals show no sign of recovery. Global lithium output has increased but China appears to have its demand covered and other global battery producers are not online yet or are not getting their gigafactories expanded quickly. Demand is projected to soar, and prices recover but we do not know if that will occur in 2024.
Oil caught an updraft from the CPI news reaching $73.65/bbl this morning as it struggles to remain over $70.00/bbl. High U.S. output continues to weigh on prices, and ongoing Red Sea navigation issues create more uncertainty.
Uranium continues to be strong, at $92.50/lb. France has announced a major commitment to nuclear power, disappointing many renewable energy proponents. Annual global supply remains constrained and well below demand. New sources of production are needed but slow to come online.
This is widely expected to be a particularly good year and many market sectors may be approaching a takeoff point in the investment cycle, as M&A activity ramps up and institutional capital is starting to be deployed. There may be some unpleasant events before the good takes hold, so do not be uninvested.
Investors have become more focused on crypto markets after U.S. regulators late on Wednesday approved the first U.S.-listed exchange-traded funds to track bitcoin, a big step for the cryptocurrency world. This may be a negative for the gold bulls.
The call for critical reforms in short-selling regulations continues, following on from recent events like the SEC’s adoption of new Rule 13f-2 to provide greater transparency to investors and South Korea’s hefty fines on banks for “naked short selling”.
The vulnerability of pension funds and retail investors to aggressive short-selling tactics demands immediate action. This is not just a junior mining issue but impacts all sectors including technology, real estate, retail, and finance.
To safeguard investors, enhanced transparency, daily reporting, and stricter penalties for unethical market practices are required. Collaborative efforts between countries are vital in shaping international agreements for responsible short-selling practices.
An interesting commentary out of the U.K. can be found HERE. Keep the pressure on the regulators to fix the broken system. Follow “Save Canadian Mining”.
It has been an interesting week for our clients; we are pleased to present to you our round-up of their news released between January 8-12, 2024.
Mining
On January 10, 2024, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) released a video featuring Sokoman Minerals’ President & CEO, Tim Froude, as he joined Crux Investor delivering a concise summary of Sokoman’s most active projects:
100%-owned Moosehead Gold Project in Central Newfoundland
100%-owned Fleur de Lys Gold Project on the Baie Verte Peninsula NW Newfoundland
the Killick (formerly Kraken) Lithium Property in SW Newfoundland
Watch the interview HERE.
On January 10, 2024, Tenet Fintech Group Inc. (CSE: PKK) (OTC Pink: PKKFF) announced that CanadianSME Magazine published an article on Tenet’s Cubeler® Business Hub. “In Canada, where small and medium-sized enterprises (SMEs) form the robust backbone of our economy, embracing digital tools is an act of bold vision, a step into a future where growth and competitive edge are redefined,” said Marc Pearson, Vice President, Global Channels & Strategic Alliances of Cubeler®. To read the article (go to page 91): click here.
Save the Date
Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) CEO, Tim Froude and his team will be attending the AME Roundup in Vancouver and will be available at the Sokoman booth #1501 on January 24 and 25. If you are attending the event, we invite you to stop by and get updated on our exploration/drilling plans on our properties in Newfoundland this year.
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