As has happened countless times, gold performed a proxy role for uncertainty in financial markets with investors struggling to balance central bank interest rate increases against the opportunities of China’s economic reopening.

The net result was a stalemate, with the U.S. stock market flat, European stock markets up slightly and Australia as measured by the all-ordinaries index down marginally even as talk of an end-of-year economic “soft landing” gained support.

Investment banks universally expect Newmont, already the world’s biggest gold producer, to sweeten its all-scrip offer which on the day it was lobbed valued Newcrest at $27.16, though that might not happen as Newcrest has consistently traded lower.

Other local gold stocks also failed to react to the biggest corporate move in gold for decades, perhaps a sign that investors are more focussed on central bank rate moves than listening to stockbrokers trying to talk up business.

What the brokers are battling is an understanding by individual investors that they can now get at least 4% on a government-guaranteed bank deposit, which is a comfortable position given ongoing doubts about the strength of the global and domestic economy.

Rates will be one of the big issues for the rest of the year, along with concern about a possible recession, the ongoing war in Ukraine and trying to figure out exactly what game China is playing with its spy balloons.

A less widely discussed topic is one working in Australia’s favour, commodity shortages, which are being experienced across the spectrum thanks to China’s reopening and a lack of investment in new production with copper and zinc this week’s hot shortage topic.

Copper moved back above US$4 a pound as stockpiles held in the warehouses of the London Metal Exchange (LME) fell to a five-year low of 26,000 tonnes (it was 145,000t six months ago), aided by industrial action in Peru’s copper mines and a threat by First Quantum to close its big new mine in Panama because of a government dispute.

Zinc weakened late this week but only after trading up to US$1.57/lb as LME stocks followed copper down to a five-year low of just 15,500t compared with 155,000t at this time last year.

The past week has also seen the restart of the conference circuit with several Australian events failing to attract much interest and even one of the world’s biggest, Mining Indaba in South Africa’s premier tourist destination, Cape Town, a disappointment due to its overweight government involvement.

Highlights, or were they lowlights, was a call by the president of Congo for more investment in energy transition metals just as his government was cancelling a lease on the Manono lithium project of AVZ Minerals and a speech by local industry leader Neal Froneman in which he lamented an “investment strike” in South Africa which is also running low on water, power and other essentials.

Gold, as mentioned, was the news making metal this week thanks to Newmont’s share-swap bid for Newcrest, though most share price moves were modest, up or down, including:

  • Northern Star, which is next possible cab off the takeover rank, slipping 46c (3.6%) lower to $12.33.
  • Evolution, another frequently mentioned target for a global gold major, down 3.5c to $3.21.
  • Gold Road, down 4c to $1.57.
  • Lefroy Exploration added 2c to 25c after announcing multiple copper and gold intersections at its emerging Burns project in WA.
  • Orecorp also edged up with a half-cent rise to 45c after announcing a power supply agreement for its Nyanzaga project in Tanzania, and
  • De Grey Mining also managed a rise of half-a-cent to $1.45 after announcing the receipt of financing offers for its Mallina project in WA.

Copper stocks did better than gold thanks to its price edging higher, delivering a boost to miners and explorers such as Sandfire which added 29c to $6.45 and Carnaby Resources which rose by 14c (11.5%) to $1.30 after reporting high grade copper hits from drilling at its Mt Hope project in Queensland with a best hit of 6 metres at 6.7% copper plus 1.2 grams of gold per tonne

Other copper news and moves included:

  • Tennant Minerals rising by 1c to 4.2c after the latest round of high-grade copper assays from drilling at its Bluebird project in the Northern Territory with assays up to 6.2% copper over 30.5m, plus gold at 6.8g/t.
  • Hammer Metals reported a 30m intersection of 1.1% copper plus heavy rare earths from a depth of 48m at its Hardway prospect in Queensland, and
  • Rex Minerals rose by 1c to 28c after announcing the start of a search for partners to help develop its Hillside copper project in South Australia.

Lithium stocks led the battery metal sector higher, again, with the Canadian star Patriot adding another 6c to $1.70 after reporting an extension of its CV5 pegmatite at the Corvette project in Quebec. The stock is now up 96c (129%) since the start of the year.

Other lithium moves included Pilbara Minerals, up 3.5c to $4.76. Allkem, up 2c to $12.85, and C29, up 4c 28c after reporting a brine-rich aquifer from first drilling at its Pocitos project in Argentina.

Rare earth stocks were as flat as the rest of the market despite a steady flow of positive exploration news that included Nimy Resources announcing the start of a drilling campaign at its promising Mons rare earth, nickel add lithium project in WA with the stocks up a modest half-a-cent to 30c.

Hastings, one of the emerging rare earth leaders, upgraded the reserve estimate at its Yangibana project in WA to win a 2c share price rise to $3.33, while Lindian Resources fell 3.5c to 21c despite an encouraging set of assays from its Kangankunde project in Malawi.

Other news and markets moves included:

  • Fortescue Metals added $1 to $22.74 thanks to the iron ore price sticking around US$124/t and investor buying in hope of another bumper dividend announcement later this month. The stock might also have got a boost from reports of a major cost cutting campaign which could see up to 1000 white collar jobs eliminated.
  • Coal stocks also rode the China reopening theme, led by New Hope which rose by 21c to $5.83 and Stanmore, up 10c to $3.59. Stanmore could be a winner from the normalisation of the ratio between thermal and coking coal which has been out of kilter for the past year thanks to a Russian supply shortfall.
  • Azure Minerals rose by 1.5c to 33c after announcing a 28% increase in the resource at its Andover project in WA which now stands at a contained 97,300 tonnes of metal.
  • EQ Resources, an emerging Queensland tungsten producer, slipped 0.1c lower to 4.6c but scored a speculative buy tip from Morgans which sees the stock rising to 6.6c as it pushes ahead with work on the Mt Carbine project.
  • Lithium Energy rose by half-a cent to 91c after reporting high grade graphite assays from drilling at the Burke project in Queensland with a best hit of 102m at 13.3% total graphitic carbon, and
  • Thomson Resources drifted 0.1c lower to 1.7c despite reporting outstanding tin assays from drilling at the Bygoo project in NSW, including 2.2m at 4% tin from a depth of 81.6m.