Australia's big miners have rallied hard, but that hasn't stopped Credit Suisse moving overweight (reports The Australian Financial Review).
Australian mining giants might have had a stellar run over the past 12 months, but Credit Suisse’s head of global equities, Andrew Garthwaite, believes they’ve got scope to push higher still on the back of some big global trends.
Credit Suisse moved overweight on the mining sector earlier this week, after seeing signs that the slump in global industrial production in the final quarter of 2018 was starting to bottom out.
The zinc price has been one of the surprise packages in the year to date. By now, most forecasters had the galvanising metal coming off its 2018 highs to be trading at $US1-$US1.10/lb (reports Stockhead).
But zinc has had other ideas. It was last quoted at a near 8-month high of $US1.29/lb, making it the second best performed metal of the year to date behind nickel.
The metal’s price strength is a response to stocks on the London Metal Exchange falling to the lowest levels since October 2007.
Currency values, rather than commodity and share prices, have emerged as the key force in shaping financial markets over the rest of 2019
Currency values, rather than commodity and share prices, have emerged as the key force in shaping financial markets over the rest of 2019, with the likelihood of a continued decline in the Australian dollar ensuring increased interest in gold.
Westpac Bank this week joined the “dollar down” club with a forecast of a slide in the Aussie currency to US68 cents over the remainder of the year, and while that might not be a big fall from its current US70.8c it would lift gold above $A1900 an ounce.
Gold played second fiddle to industrial metals this week with copper, nickel and iron ore doing best despite the rolling uncertainty of the China v US trade war. But in the background was an event which could see gold perk up next week.
Copper is on a tear in 2019 but it could be sign of a bigger things to come (reports Stockhead).
The problem is, when it does take off, who’s going to be ready for it?
MineLife director Gavin Wendt said the current price action reminds him of zinc prices a couple of years ago, which soared more than 250 per cent in less than two years.
Back then, it was about a looming supply deficit, but nobody knew when the pressure would actually release.
Top Melbourne fund manager Hedley Widdup from Lion Selection Group has likened current market conditions for junior miners to the early 2000’s , but has predicted a growing flow of money into the junior resource sector over the months and years ahead.
Plus, strong iron ore price recovery boosts the outlook for Centaurus’ Brazilian iron ore project and Gateway looks to repeat the lucrative strategy of revitalising old WA gold mines
It was suggested here last week that what Breaker Resources’ executive chairman Tom “Colonel” Sanders had to say at this week’s Resources Rising Stars’ conferences in Sydney and Melbourne could be pivotal.
The argument was that having established a 1.1m oz resource at its February 2016 virgin Bombora discovery, 100km east of Kalgoorlie, the pressure was on Sanders to convince the market it was undervaluing the stock in a major way.