Positioning for epic gains in multiple clean-energy metals in 2024

I was recently in Vancouver where multiple resource conferences were being held and left with my contrarian heart smiling.

It’s clearly a tale of two markets. Those with capital looking for opportunistic deals (and there are a lot of them) and those looking to raise capital (not the best position to be in right now).

What stood out to me was how much conviction – on both the retail and institutional side – there was that we are likely at or very near the bottom in multiple commodities. And despite that, there’s very little capital actually being deployed to take advantage of what’s coming.

What’s coming? Commodity shortages. In uranium, in copper, and, yes, in lithium as well. 

Gold is starting to put in a new bottom at $2,000/oz. I fully expect new all-time highs this year.

I also see a surging copper price that’s going to catch a lot of people off guard.

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The combination of rate cuts (whenever they happen), a Chinese economy that appears poised for more stimulus, and the transition to a greener economy – whether you agree or not – is going to continue to add demand to what is an emerging and serious copper deficit. 

The recent COP28 climate change conference saw over 60 countries pledging to triple global renewable energy capacity by 2030.

That’s right around the corner… and I’m not sure if you’ve noticed but the world is not becoming more stable.

BMI recently forecast that the higher renewable energy targets would boost copper demand by an extra 4.2 million tons by 2030 leading to a 60% increase in the copper price. Like uranium, I think the copper price overshoots and I see prices doubling from today’s levels.

Much like lithium and uranium several years ago, I like investing and speculating on materials that we need, not just want. Copper checks every box. Electric vehicles, power grids, and wind turbines all need large quantities of copper to make the energy transition a reality.

Discoveries are proving more difficult, ore grades are declining, and permitting and building a mine still takes many, many years.

Whether the copper price increases by 50%, 100% or some other made-up number, the trend is clear: Companies that are able to make copper discoveries of significance will continue to command substantial premiums as major companies like Teck – and even Barrick which now wants to get into the copper business – look for ways to replenish reserves at a time when the rest of the world is also looking to do the same.

We saw the run in lithium – and now the pullback, which is healthy but overdone.

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We saw – and will continue to see – the run in uranium which is at 16-year highs and has surged into the triple-digits. You wouldn’t know it by the lack of speculative capital in the sector right now.

Of course, no one can call the absolute bottom for lithium… but we’re close. I’m writing checks to take advantage of the turn because, when it does turn, it will do so violently leaving many chasing. 

Let’s get it! 

Gerardo Del Real

Gerardo Del Real
Editor, Daily Profit Cycle