Weekly Mining Commentary

Global equity markets were up 0.6% last week (0.5% in the previous week). The U.S. Fed’s comments last week indicated that they are in no hurry to commence rate hikes, as they expect inflation to be transitory. Tapering will commence in late November as we expected. Another major event last week was the approval of Biden’s US$1.2T infrastructure bill. We believe that slow rate hikes and passing of the infrastructure bill are positive for base metal prices.

Gold and silver prices gained 2% WoW on inflation concerns. Zinc prices dropped despite lower inventory levels. That said, zinc and nickel prices have been highly volatile in the past few months. We continue to believe that supply chain disruptions will support commodity prices in the near-term.

Source: FRC / Various

Source: FRC/Various

Source: FRC/SHFE

Valuations of gold producers were up 4% WoW; base metal producers were down 4%.

Source: S&P Capital IQ & FRC

Source: S&P Capital IQ & FRC

Source: S&P Capital IQ & FRC

Last week, four (previously three) out of the 15 hardest hit nations experienced higher daily new COVID-19 cases. Three countries (previously two) experienced WoW increases in deaths. Globally, 51.02% have received at least one dose, up 1.5 ppt WoW vs 0.8 ppt the same time last week. 74.79% of Canadians are fully vaccinated (0.5 ppt vs 0.7 ppt) vs 67.20% in the U.K. (0.2 ppt vs 0.2 ppt), and 57.23% in the U.S. (0.01 ppt vs 0.6 ppt).

Source: Our World in Data / FRC

Source: Our World in Data / FRC

We are maintaining our price forecasts.

Source: FRC

Source: https://www.researchfrc.com/weekly-mining-commentary-91