Political turmoil clouded financial markets this week but through the fog could be seen several emerging trends, one of which was a currency-led gold-price revival and another was a fresh step backwards by the once-booming iron ore sector.
Alexander Downer is best known as a former Australian foreign minister, but his latest claim to fame is an ability to back a winner in a downbeat mining sector thanks to a ride hitched on the remarkable revival of uranium.
Gold was missing in action during this week’s big mining event, the annual Diggers & Dealers forum in Australia’s gold capital, Kalgoorlie, but that might not be for much longer as gold’s traditional price drivers return.
He won’t be there, but the shadow of Donald Trump will loom over next week’s Diggers and Dealers forum in Kalgoorlie with falling metal prices caused by his trade war with China likely to dampen optimism at the event, as they have on financial markets this week.
Better late than never is the kindest comment that can be made about the discovery by big-name investment banks of what Prospector’s Diary readers knew two weeks ago: that rare earth producers should be a winner from the spreading trade war.
Good news has been hard to find this week but a determined prospector can always locate nuggets such as oil explorer, Carnarvon Petroleum, and an emerging potash producer, Danakali, which both rose to multi-year share-price highs.
Trump’s trade war rocked global markets this week, but for investors in Australian mining stocks there could be a window of opportunity that no-one seems to have yet peaked through: the opportunity in rare earths, or more specifically the fact that China has them and US industry must have them.
Lithium stocks, after suffering a few months of uncertainty about the potential for over-supply of the battery metal, got a double boost this week when two of the world’s leading investment banks, Goldman Sachs and Credit Suisse, said it was time to buy, not sell.