Gold and Precious Metals

Precious metals miners among top gainers; Alto, Ramaco continue to drop

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The S&P Materials sector closed this trading week in green at +1.95%, one of the top gainers for the five-day period. The Materials Select Sector SPDR (NYSEARCA:XLB) was also up +1.01%.

Copper prices extended recent gains on Friday on optimism about a revival of demand in top metals consumer China after a mortgage rate cut and further progress in lifting COVID lockdowns. Last week, prices had plunged below $9,000/ton for the first time since October on rising fears about a slowing global economy and reduced demand for metals.

London Metal Exchange benchmark copper (HG1:COM) rose 0.8% to $9,490/metric ton by 10.35 GMT on Friday, its highest since May 6, capping a 3.3% gain for the contract for the week, accoridng to Reuters.

Other base metals also gained, with LME aluminum up 1.7% to $2,957/ton, tin +1.8% to $34,850, zinc +0.8% to $3,743.50 and lead +3.7% to $2,140.

Gold spot price (XAUUSD:CUR) slipped on Tuesday pressured by strong U.S. retail sales data and expectations of aggressive interest rate hikes. Price settled at $1,845.03 at market close on Friday, registering a 1.86% gain for the week.

Lumber (LB1:COM) prices fell to a new 2022 low on Thursday as existing home sales data showed a continued slowdown in the housing market. Prices fell ~28% to $665 by the end of the week.

Take a look at this week’s top gainers among basic material stocks ($300M market cap or more):

  • Largo Resources (LGO) +17.90%; Largo continued to rise the week after it posted Q1 results and raised FY22 guidance.
  • Fortuna Silver Mines (FSM) +12.96%; FSM, Taseko and other precious metals mining shares surged this week as gold prices bounced.
  • Kronos Worldwide (KRO) +12.54%; Deutsche Bank raised its price target for the firm during the week, helping prop up shares.
  • Taseko Mines (TGB) +9.86%;
  • Sociedad Quimica y Minera de Chile (SQM) +9.83%; Shares surged to an all-time high on the back of stellar Q1 results.

Take a look at this week’s top losers among basic material stocks ($300M market cap or more):

  • Alto Ingredients (ALTO) -14.96%; Shares have continued to fall after Q1 earnings and revenues missed consensus targets.
  • Ramaco Resources (METC) -13.64%; Ramaco’s Q1 performance also fell short of expectations, putting pressure on shares.
  • Resolute Forest Products (RFP) -10.09%; Earlier this month RFP warned that inflationary pressures and rising interest rates could hurt pricing and margins.
  • Hawkins (HWKN) -9.50%; Shares have fallen after Hawkins reported its Q1 numbers.
  • Neenah (NP) -7.92%; Early this week Neenah announced the future executive leadership team and operating structure after its merger with Schweitzer-Mauduit (SWM).

Other materials ETFs to watch: iShares Global Timber & Forestry ETF (WOOD), Materials Select Sector SPDR ETF, Vanguard Materials ETF (VAW), iShares Global Materials ETF (MXI), SPDR S&P Metals and Mining ETF (XME), VanEck Vectors Gold Miners ETF (GDX), iShares MSCI Global Gold Miners ETF (RING), Global X Copper Miners ETF (COPX).

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