What caused ripples of anxiety across the investing world was the U.S. core consumer price index (CPI) rising by 0.4% in March, defying forecasts of a fall and prompting comments such as “the sound you just heard was the door slamming on a June rate cut”.

Some assets lost a little ground this week as the U.S. CPI data was digested along with the reality that it’s proving harder than some people expected to get the inflation genie back into her bottle.

But most assets, including gold, held their ground and some delivered surprising price rises, including iron ore and the most heavily discounted metal of all, nickel, which rose by 7% to move back above US$18,000 a tonne.

To put the tabloid shock/horror inflation headlines into perspective, the 1% fall on the New York stock market was hardly a crash, just enough to stem some of irrational exuberance which had pushed prices too high, too quickly.

Looked at over the last five trading days, there was indeed a midweek hiccup but it simply took the U.S. market back to where it was at this time last week. Yawn!

It was a similar story on the Australian market, which took a short-term hit but rose over the week with the all-ordinaries index gaining 0.7%.

Gold and copper, the dynamic duo of the precious and base metal families, retained their leadership roles in the commodity sector. Gold because of its safe haven qualities. Copper because no economy can work without lots of it.

Citi, an investment bank, summed the status of gold (and silver, its poor relation) by asking whether what’s happening is “rational exuberance for gold and silver markets?”

The answer from the bank to its question was yes, there is a rational reason for gold steaming towards a three-month price target of US$2400/oz (it’s almost there at US$2340/oz), and for silver rising in the short term to US$28/oz (also within touch of that target at US$27.91/oz).

But those price tips from Citi are not the end of the story because the bank sees the ride continuing with gold heading for US$3000/oz and silver for US$32/oz over the next six-to-12 months.

Local gold leaders performed well. Northern Star added 55c to $15.17. Evolution was up 17c to $3.95. De Grey rose by 4c to $1.32 and Bellevue gained 7c to $1.93.

Other gold news and share price moves this week included:

  • Emerald Resources confirmed its rising star status with strong March quarter production of 28,539oz which helped lift the stock by 35c to $3.50 – more than double its price of $1.70 at this time last year.
  • Regis Resources split opinions after reporting higher construction costs for its McPhillamys project in NSW. The stock added 13c this week to $2.10 but Citi downgraded its price tip to $1.30 (and said sell) whereas Bell Potter said buy and stuck with a price tip of $2.60.
  • Capricorn Metals had an issue similar to that at Regis with 16c rise on the market to $5.33 despite a sell tip from Macquarie and a price target of $4.80 offset by a Bell Potter advising clients to buy because the stock is expected to reach $6.15, an increase on an early tip of $5.95.
  • Perseus won a bidding duel with Canada’s Silvercorp for Orecorp and got a 6c share price increase to $2.28 as a reward, and
  • Low profile Waratah Minerals reported encouraging assays from drilling at its Spure project in NSW with a best hit of five metres at 6.69 grams of gold per tonne, boosting its share price by 4c (57%) to 11c.

Copper, after reaching an 18-month high of US$9526/t on Wednesday, slipped back to US$9416/t but remains on track to reach Morgan Stanley’s December quarter forecast of US$10,500/t, and then perhaps up to the US$12,000/t seen earlier this month by Citi.

The rise of copper, and the recovery of iron ore to US$105/t, played perfectly for the mining majors with Rio Tinto rising by $6.82 (5.6%) to $127.47. BHP added $1.47 to $45.71 and Fortescue put on 98c to $25.72.

The importance of copper to BHP was highlighted in a midweek Bloomberg report that the company, best known for its iron ore, should next year displace Chile’s state-owned Codelco as the world’s biggest copper producer.

Local copper stocks had a mixed week. Sandfire ran out of puff, shedding 21c to $8.76, ending a powerful run over the last six months which has seen the stock rise by $2.56 (41%).

Aeris added a respectable 5.7c (33%) to 23c. 29Metals edged up another 3.5c to 53c. Encounter eked out a 1c rise to 26c after reporting copper in drill core at its Jessica project in the Northern Territory, and Krakatoa rocketed up by 1.2c (150%) to 2c after reporting encouraging copper and gold assays in rock chip samples at its Turon project in NSW but the stock remains valued at a lowly $7.6 million.

Nickel, which has fallen off the radar screens of most investors after a disastrous 12-months, continued to move up this week with a rise of 7% to US$18,043/t – leaving it down “just” 20% on this time last year.

Chalice Mining with its nickel and palladium heavy Julimar project in WA rose by 26c to $1.41 after reporting that it had started the environmental approvals process. Centaurus with its Brazilian nickel interests added 2.5c to 34c and Lunnon Metals gained 1c to 25c.

Lithium, like nickel, continues to climb out of the hole into which it fell last year, with a 2% rise this week in the price of lithium carbonate in China and an upbeat market assessment by Macquarie.

Top lithium stock this week was Vulcan which added 69c (26%) to $3.33 after reporting first production of lithium chloride from its Landau project in German.

Liontown was the local lithium leader with a rise of 16c to $1.36 while Pilbara Minerals added 21c to $3.99.

The uranium price slipped back to US$87 a pound, down US$1.50/lb for the week, but still 70% higher than this time last year. Paladin led the way up with a rise of 11c to $1.35, supported by a Morgan Stanley buy tip and price target of $1.75.

Deep Yellow added 5c to $1.43 after receiving strong investor support for a $30 million capital raising while Boss slipped 26c lower to $4.78.

Other news and market moves of interest this week included:

  • Winsome Resources up 42c (41%) to $1.44 after reporting high grade assays from drilling at its Adina lithium project in Canada with a best hit of 61.5m at 1.62% lithium.
  • Rare earth stocks were in demand after news that iron ore billionaire Gina Rinehart had bought a 5% stake in MP Materials, the biggest U.S. rare earth producer, which rose by 14% after Rinehart’s move was reported.
  • Lynas, the leading local rare earth producer, rose by 42c to $6.08 while Arafura, another of Rinehart’s rare earth plays. added 1c to 20c.
  • Develop, the mine developer and contractor, reported an encouraging financial outlook for its Woodlawn zinc and copper mine in NSW but slipped 8c lower to $2.30 even as Bell Potter stuck with a buy tip and price target of $3.30, and
  • Whitehaven Coal continued to defy coal critics with a rise of 68c to $7.76 supported with buy tips from UBS and Macquarie which see the stock continuing to rise as it migrates from steaming to metallurgical coal. UBS has a price target of $8.70, Macquarie’s target is $9.