Gerardo Del Real
April 19, 2023
Markets, gold, silver, and oil rallied as less than expected inflation apparently now means no more inflation, and we’re supposed to believe that this new definition will give the Fed the cover it needs to slow or even reverse rates.
I wouldn’t hold my breath but I also don’t have a crystal ball.
What I do know is that there are coiled springs in the resource space ready to launch higher. I also know that if growth and inflation both slow together then gold and bonds will both benefit.
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Gold had failed to break and hold the $2,000 level but now looks ready to establish the $2,005/oz level as a floor and go test the next level of resistance around the $2,020/oz level. Not a coincidence to see an almost identical correlation between the 10-yr yield and the gold price. Expect that to continue.
A sustained break of the $2,020 level could see everyone’s favorite yellow metal back in favor attracting a serious bid.
Speaking of serious bids, Newmont increased its bid to acquire Australian miner Newcrest Mining in an effort to create the world’s largest gold company acquisition.
Texas-based Lithium startup EnergyX just attracted a $50 million investment from none other than General Motors to help fund a more efficient method to extract lithium from salt flats.
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The catch? If successful, General Motors gets first rights on lithium production developed by the startup.
Kind of odd to see General Motors writing nearly $1 billion in checks to secure more lithium supply when the Cathy Woods’ and Goldman Sachs of the world say all you have to do is wait for the looming glut of lithium about to hit the market.
From gold to lithium to uranium and copper, there’s been billions of dollars offered from the biggest companies in the world to secure more supply of each respective metal.
That’s not a coincidence folks. They don’t have a crystal ball either but they know what’s coming. Make money from it.
Gerardo Del Real
Editor, Daily Profit Cycle