The US dollar gave gold a blood nose this week in a powerful demonstration that America remains the 600-pound gorilla in the financial world, but across the border in Canada there was a conference where another metal shone: copper.
If oil stocks are not part of your investment portfolio then you really ought to start thinking about adding a few because last week saw an acceleration of a re-awakening process that has lifted small oils into the ranks of top performers on the ASX
Resources stocks in Australia trended up over the past week, at least that’s how I saw the market from afar with this edition of Prospector’s Diary being filed from New York where interest in commodities is growing rapidly.
Gold, at least when priced in Australian dollars, saved the day for investors in what was a lacklustre and short trading week of falling values as the threat of a global economic slowdown grew larger and rising US interest rates helped build a wall of worry.
Nickel with a 7 in front of its price and oil moving closer to a price with an 8 in front were two highlights in a week dominated by geopolitical events, but there was perhaps a subtler shift underway with mid-tier resources stocks possibly being acquired as yield plays.
Oil at a three-year high and gold not far behind were the best indicators this week that financial markets are becoming more volatile and while it might seem hard to pick winners at times like these, they are actually quite obvious – they’re stocks exposed to gold and oil.
Cobalt stocks led the way up in a short week on the ASX but the more interesting issue which is yet to be picked up by investors is the potential for a sea-change in iron ore, where the sell-off in low-grade producers could be coming to an end.
Takeover time in the mining sector gathered pace in the shortened pre-Easter week when OZ Minerals launched a bid for copper explorer Avanco -- prompting a sell-off in OZ shares and serving as a warning for investors to watch out for over-eager managers.