I always pay attention to the relative number of gainers and losers when updating stock prices in the Full Portfolio Table and this was the best ratio to date: 36 of the 42 stocks in the portfolio were up compared to the last time I printed the table, on December 15.
There were two reasons: uranium and gold.
I’ll start with uranium, where the spot price is up 8% in a few days. There are two related reasons: buyers returned to the spot market after a predictable holiday break to find uncommon violent political demonstrations across Kazakhstan, which produces 46% of the world’s uranium.
Today was the fourth straight day of protests in Kazakhstan. On Saturday the government deregulated the price of liquified petroleum gas (LPG), which many Kazaks use in their cars. The price immediately doubled and protests spread across the country. The president has since dismissed the prime minister and cabinet and imposed a state of emergency across several cities. Internet connectivity has also been largely cut off so updates are sparse.
Some social unrest in Kazakhstan is normal but a country-wide protest is a first, so there’s no knowing how long this could last. While the
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From the Gold Resource Investor Letter: December 2021
Inflation means the Fed really is ending QE and raising rates. Last week bond traders finally accepted that reality…and then dumped bonds before the market loses a massive and totally price-insensitive buyer (the Fed). It made for a volatile and negative week that could be a preview of what’s to come. Also…with the first rate hike now likely in March, gold’s seasonal run has been squeezed out. I expect range-bound movements (like we’ve had for a year already) until the first hike sets gold going again.
One of the things I love about my job is that, to understand metals markets, I must understand the macroeconomic landscape.
Sometimes the landscape stays stable for weeks, months, even years. Such was my first metals bull market experience: the China growth story emerged in the early 2000s and pushed metals – base and precious – upward for years. It was supply and demand in an inflation and growth environment. Then the Great Financial Crisis blew everything up but before that – and for gold also after – commodities had a stable set of year.
Stability isn’t quite how I would characterize things today. Instead, every few months something happens that requires me
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