Mineral prices, shares and currencies reacted positively to the 0.25% increase in U.S. rates and though there’s more to come, including Australia’s own 0.25% rise forecast for Tuesday, the slowing trend indicates that central banks are confident that they have inflation under control.

While share prices are a useful guide to the outbreak of optimism which has seen the ASX all ordinaries index rise by 8.6% over the past four weeks, there are other interesting measures of the speed at which markets are moving, including gold and currencies.

Gold, which competes with the U.S. dollar as an investment safe haven, added US$30 an ounce to US$1955/oz immediately after the U.S. central bank announced its latest rate increase with US$2000/oz the next target, and then perhaps up to Morgan Stanley’s tip of US$2160/oz by the end of the year.

But offsetting the gold rise, and an issue for investors to consider, is the gathering strength of the Australian dollar which has also been on a roll since Christmas, rising by US5 cents to US71.5c, limiting the financial effect on Australia’s mineral and agricultural exports.

The commodity-price boom unleashed by China’s restart has worked miracles in Australia’s trade balance and could also be doing wonders for the Australian Government budget which some observers believe will flip from deficit to surplus by the end of the year, much earlier than expected, which is why the local dollar could move much higher. Parity perhaps?

Two events during the week highlighted the positive future for Australian miners.

The first was in Canada, where investors were told that an “explosive” boom is coming, especially for junior miners.

The second was in London where a well-connected resources bank predicted a European response to the U.S. Inflation Reduction Act (IRA) which has been powering energy transition commodities, such as lithium, copper and nickel.

In Canada, mining entrepreneur Ross Beaty, told delegates to the Resource Investor Conference in Vancouver that “synchronised bullish conditions for almost all metals” meant that there had never been a more interesting time for mining.

In London, Charlie Cryer, head of RFC Ambrian, said in a note to clients that the European Union is expected to release on March 8 its Critical Raw Materials Act in response to the US$370 billion IRA which has been driving interest in minerals exposed to energy transition and investment in non-Chinese supply.

Gold, as mentioned, had a good week, complete with an update from the World Gold Council which said central bank gold purchases in 2022 were at a 55-year high of 1136 tonnes, underpinning a year when overall demand from investors and jewellers rose strongly.

On the ASX, the gold index led the sectors with a 5% increase for the week, most of it coming on Thursday. The all ordinaries, despite the better overall sentiment, could only manage a rise of 0.5%, perhaps a sign that the January rush has run out of steam, while the energy index (oil and gas) fell by 4% as the oil price slipped by US$5 a barrel to US$83/bbl.

Notable gold stock news and moves included:

  • Emerald Resources, up 9.5c to $1.48 after reporting high grade drill results from its 60% owned Bullseye project in WA with a best hit of 9 metres at 7.35 grams of gold a tonne from a depth of 59m – with a rich 1m seam assaying 58.27g/t.
  • Alkane Resources boosting gold production guidance to 70,000oz from its Tomingley mine in NSW, helping the stock rise by 5c to 71c and for Bell Potter to retain a price target of $1.
  • Kingsgate Consolidated enjoyed an overdue bounce of 10c on Thursday to $1.71 after reporting solid exploration results south of its troubled Chatree gold mine with a best intersection of 26m at 3.02g/, and
  • Sector leaders moved higher. Northern Star added 49c to $13.27. Evolution added 21c to $3.42 and Newcrest rose by 84c to $23.31.

Battery metals had a mixed week led up by Canadian focused lithium explorer Patriot which reported more solid drilling results and enjoyed another 39c boost to its share price which rose to $1.72, close to Macquarie’s target price of $1.80.

Other lithium stocks looked weary after a stellar run over the past few months with IGO slipping $1.69 lower to $14.52 despite an excellent half-year profit and sharply higher dividend. Macquarie is sticking with a price target of $21.

Other battery metals news and share price moves included:

  • General Motors signing a US$650 million deal to buy lithium from Lithium Americas which is developing the Thacker Pass project in Nevada. Lithium Americas rose by 5% this week to US$24.70, valuing the stock at US$3.3 billion and serving as a warning to Australian investors that they’re not alone in the lithium rush.
  • Nimy added 2.5c to 31c after reporting high grade lithium soil anomalies from sampling at its South Lake prospect nears the Mons project in WA.
  • Global Lithium fell 18c to $2.22 despite reporting fresh assays from work at its Manna project in WA. Macquarie is sticking with a price target of $4.20, and
  • Core Lithium slipped 1c lower to $1.14 but could go a lot lower according to the investment bank Jarden which expects a price fall to 49c.

Rare earth stocks continued to edge higher building on gains made over the past three months led by Lynas which added 66c to $9.68, shrugging off the latest reports of lingering trouble with government authorities in Malaysia who want to close its processing plant. CG Capital Markets maintained a buy tip and $11 price target.

Other rare earth news and moves included:

  • Dreadnought adding 1c to 11c after announcing a $21.4 million capital raising priced at 10c with the funds earmarked for the company’s Mangaroon project which is next door to the Yangibana project of Hastings Technology Metals which slipped 27c lower this week to $3.38, and
  • Heavy Rare Earths rose by 1c to 14c after reporting its best yet assays from work at its Cowalinya project in WA including 14m at 0.32% from a depth of 16m.

Iron ore continued to trade at an elevated US$128 a tonne though there are signs that investment banks are growing cautious after a 50% price uplift in three months and after a report from the World Steel Association that global steel output fell by 4.2% last year to 1.87 billion tonnes, the first decline in seven years.

Fortescue remains the focus of local traders but not the banks. The stock slipped 85c this week to $22.30 but copped sell tips from three banks with Macquarie seeing $17.50 as the price target, Credit Suisse forecast a future price of $17.20 while Goldman Sachs won the low-ball price tip with $13.60.

The disconnection between the market and the banks when it comes to Fortescue promises to be one of the more interesting stories of 2023 because someone is right and someone is very much not.

Other news and market moves of interest this week included:

  • Carnaby Resources adding 20c to $1.10 after reporting thick and high-grade copper assays from the latest drilling at its Greater Duchess project in Queensland with a best hit of 39m at 5.2% copper and 0.5g/t gold from a depth of 158m.
  • Kingsland Minerals said it had made a significant graphite discovery at its Allamber project in the Northern Territory including graphite rich structures up to 100m wide and 20km in length. On the market, Kingsland added 2c to 18c.
  • Mincor slipped 11c to $1.59 but could be poised for what Bell Potter calls an “earnings inflection” later this year as production from its Kambalda nickel mines ramps up, a future event which encouraged the broker to retain a buy tip and lift its target price for the stock from $1.85 to $1.87, and
  • Genex Power continued its recovery after Skip Capital and Stonepeak dropped their takeover offer with a 1c rise this week to 15c while Morgans refreshed a speculative buy tip and 27c price target.Nnnn