Energy duo uranium and lithium outshine gold as investors eye strong demand outlooks and economic growth

Even oil and gas, the most maligned component of the broad energy sector, staged a modest rally with sector leaders Woodside and Santos up a few cents.

The energy rally is the positive side of today’s financial markets, reflecting a view that global economic growth will accelerate next year, effectively the flipside of what’s driving gold, a metal which thrives in an economic crisis.

For investors, the energy v gold puzzle is an example of the uncertain times which will make the last six weeks of 2025 particularly tricky, causing nervous punters to leave their cash in the bank while hoping for a clearer picture in the new year, which can’t come fast enough.

The U-rally was driven by a 5c (41%) rise in the price of DevEx Resources to 17c after it announced the appointment of a high profile managing director in Marnie Finlayson, a career mining industry executive and sister of Genesis Minerals MD Raleigh Finlayson.

Most other uranium stocks gained ground this week, including Paladin, which rose by 47c to $8.22, and Deep Yellow, up 15c to $1.71. Boss lost 1.5c to $1.68.

The gains came despite a flat uranium price which was steady at US$76 a pound but were in line with a research report from UBS into Canadian uranium leader Cameco which painted a bright picture for the nuclear power industry. Cameco has been a uranium star this year, up 65% to C$121 and on its way to C$140, according to UBS.

Lithium stocks, driven for the past three years by demand for electric vehicles, are rising with the rapid growth in a new market for the metal, battery energy storage systems (BESS), a point made during the week in a comment from SQM, Chile’s lithium leader.

One of China’s senior lithium executives, Li Liangbin, chairman of Ganfeng, added to SQM’s optimism with a forecast that the price of the battery metal could double next year thanks to the BESS boom.

Locally, CG Capital Markets joined the BESS debate with a report which said energy storage demand could see the overall lithium market flip from surplus to deficit as soon as next year, followed by years of deficits.

CG’s report said a 57,000 tonne surplus of lithium carbonate in 2024 has shrunk this year to a surplus of 9000t and would tighten further next year when a 6000t deficit is expected, before rolling into an 81,000t deficit in 2027.

Those forecasts were good enough for CG to upgrade its lithium stock tips on Wednesday with Pilbara lifted from an old target price of $3.30 to $4.40 as the stock moved up by 43c during the week to $4.13.

Liontown did even better, rushing past CG’s updated price target of $1.55 ($1.10 previously) to trade at $1.58. IGO joined the party with a 41c rise to $6.99 perhaps heading up to CG’s latest target of $7.30 which is well up on the old target of $5.40.

Macquarie Bank was unimpressed with the latest lithium rally, advising clients to “take profits before buying the dip,” a cautious view based on the 10-day public review into the sidelined Jiangsu lithium mine in China with a price-depressing restart likely next month.

London broker SP Angel had a mixed view of the lithium market, first noting that battery demand was growing rapidly in the Middle East and Latin America and that one of the early major players in Australian lithium, the iron ore billionaire Gina Rinehart, has switched her speculative bets to a greater focus on rare earths.

Lynas, the top Australian rare earth stock, had a red hot week, rising by $2.06 (14%) to $16.07 after an analyst tour of the company’s Malaysian processing facility.

UBS came away from the Lynas site visit with a warning that the rare earth market remained tight which meant Lynas, as the world’s major produce outside China, deserves a share price premium, which it got with a UBS price target of $17 on a day when it was trading at $14. Lynas closed yesterday at $16.06, up $2.08 over the week.

Hastings, a company driven by another iron ore billionaire, Andrew Forrest, continued its recovery with a rise this week of 3c to 62c taking its gain over the past six months to 28c (82%).

Gold, despite weakness over the past two weeks, which has seen a fall of US$200 an ounce to last trades at US$4051/oz, continues to attract central bank buying as the rush to “de-dollarise” gets stronger and as a whiff of corporate action enters the sector.

Barrick Mining, the big Canadian-based gold producer, made headlines during the week as its emerged as a target of high-profile activist investor Paul Singer and his Elliott Management, which is reported to have placed a US$700 million bet on Barrick as a break-up opportunity.

Singer’s theory is that Barrick needs to split its safe jurisdiction assets, such as those in North America, from high-risk countries such as Pakistan, Mali, and Congo.

Investors are following Singer into Barrick, the world’s second biggest goldminer, lifting the stock by 8% over the past month to US37.73 even as arch-rival for top dog status Newmont, fell by 7%.

A full blown raid on Barrick, and Singer always starts his moves slowly, could unleash a wave of gold sector deals to further consolidate the industry with Australia’s Northern Star a natural target for an international raider.

Over the past week, Northern Star has risen by $1.16 (4.5%) to $26.35, edging closer to its all-time high of $27. Evolution, the second biggest Australian gold miner, slipped 20c lower this week to $11.40.

Morgans, a local stockbroker, said its preferred way to play the gold sector was to focus on “ramp-up” situations which are executing well such as Minerals 260, which slipped 1c lower this week to 30c but is seen by Morgan as big winner next year when it could rise to 95c.

Tesoro Gold is another on Morgans ramp-up list and top pick among North American focused stocks. It added 1c this week to 6.9c but is tipped to run all the way to 32c.

Other gold situations this week included:

• Perseus, up 28c to $5.40 after its was named as a potential counter bidder for Predictive Discovery which is trying to merge with Canada’s Robex. Predictive this week added 2c to 57c.

• Ausgold eased back by 1c to 83c after announcing an $80 million raising at 80c a share for its emerging Katanning gold project in the south of WA. CG reckons Ausgold will rise to $2.05.

• Strickland was 1c weaker at 18c despite reporting fresh gold intersections from drilling at its Shanac project in Serbia including 224 metres at 1.9 grams of gold per tonne.

• Waratah Minerals was also down 1c at 50c despite an upbeat assessment of the stock by Bell Potter which likes the potential size of its Spur project in NSW, tipping the stock as a buy with a price target of 95c, and

• Astral added 1c to 21c after reporting high grade gold during infill drilling at its Theia project near Kalgoorlie in WA.

FireFly was the pick of the copper sector with a rise of 5c to $1.79 as investor confidence grows in its Green Bay project in Canada. Sandfire went the other way with a fall of 46c to $15.86, perhaps dragged down by a sell tip from UBS which has a $15.55 price target on the stock.

Other moves and news of interest this week included:

• Mineral Resources added 58c to $50.19 after its long-running dispute with chief executive Chris Ellison was resolved and a plan to replace him was dropped.

• Calix rose by 8c to 60c after its signed a joint venture with mining major Rio Tinto to trial its Zesty green steel making technology at a site near Perth.

• Sunrise Energy slipped 2c to $4.39 after raising $46 million for work on its Syerston scandium project in NSW.

• Almonty Industries fell by $1.10 to $9.35 despite announcing the start of tungsten production in the U.S, and

• ALS rose by 83c to $21.18 thanks to growing confidence in cash flows from its mineral assay services. Macquarie reckons to stock will rise to $22.85. Bell Potter says $25, and UBS reckons the target price is $26.