Market Update


Good afternoon

base metals are having a strong day, as trade tensions cool down further. Equities are also a bit stronger, while bonds are weak. the very dovish measures taken by Draghi yesterday are not backed by some important Central Banks in Europe, putting them into question.

Nickel is having a weak day - after gradually increasing recently, LME stocks got a big lift today by 100.000t to abbout 166.700 t ( the absolute low recently had been 142.000t ). But to be honest - who cares? 17.500 US/t is a fantastic price and equities never exhibited them anyway.

Palladium at a new alltime high, Platinum the strongest since March 2018!

Gold is creeping ack up through 1500, following a very volatile session yesterday.

Australian mid-sized producers back now to buying level? I think yes! A few weeks ago, all funds scrambled for cover and bought the Evolutions and Northern Stars - their performance as Index stocks had been increasingly strong, while most of the investors/funds had been underweight - so everybody piled into them - only to be caught by very pronounced weakness! The recent correction drove them down by between 20-30% - and I think to a level, which is worth buying again. The gold story does not feel at all like beeing over, so I think one should accumate these stocks!

I think Evolution, Resolute, Saracen, St Barbara or Northern Star are all looking ok again - to mention a few.

Strike Energy - back in 2017, Orica provided a loan to Strike over 2.5 Mill A$ to provide capital for the drilling activities in Jaws. The company has now elected to convert the loan to STX shares at anaverage price of 0,2064 A$ ( the 30-day volume weighetd average price ). A good vote of confidence - a conservative company like Orica would not have made this decision lightly. Orica are a very large consumer of gas.

Oceana - court hearing in the Phillippines on the 18th of Sept, which will hopefully end the access restrictions imposed by the local governor. Oceana is most probably the cheapest of the midsized producers - but the country risk in the Phillippiens remains always good for really bad headlines!

Have a nice weekend