Dr. #Copper Has Clearly Broken Out. A 4 Handle Is Not Far Away $COPX https://bit.ly/MasterMetalsETF

#Mining & Metals ETF Charts

______________________________

MasterMetals

@MasterMetals

.@BMO Raising #Lithium prices on #EV Growth- Upgrades $SQM, $ALB to Outperform

BMO analyst Joel Jackson, known for being prudent on Lithium, turning more positive on the sector for the following reasons:

 

1-      Lithium prices are only starting to rise. See charts below.

2-      We now see prices for lithium carbonate going from $6,75k/t today to $7,5k/t in 2021 and then average $10,0k/t by 2023

3-      WE now see EV penetration to grow from 3.9% in 2020 to 5% in 2020 and 12% by 2025.

4-      Recent data have shown an acceleration with Chinese EV sales up 120% in November yoy and Europe tripling

5-      Joel also sees lithium supply basically not rising in 2021 before a supply boost in 2022/23. See charts below.

6-      Joel is now using 18X EV/EBITDA multiple targets up from 12X justified by: 1- 20% demand CAGR for lithium, 2- Scarcity of liquid investments in the space, 3- ALB’s lithium unit has traded at 18X for the past five years

7-      SQM and ALB trade at 30% discount to their SOTP. Details below and attached. Joel is upgrading SQM to Outperform.

 

#Gold’s recent sell off had less to do with fundamentals, and everything to do with clearing out the “jokers” who wanted to take delivery of their December Gold Contracts.

#Gold - Some #TechnicalAnalysis on the Current State of the Market 

Gold futures prices (paper gold) were able to cross on the upside the 200-day moving average (pink line). It all looks like the low of around US$ 1'760 per ounce may just have been an aberration and the result of technical selling by the Powers That Be, aka the PPT. It had nothing to do with fundamentals, and everything to do with clearing out all the jokers who wanted to take delivery of their December Gold Contracts. The MACD turned positive as it crossed  the red line.

What is needed now is a consolidation period in the next few weeks before year end, at which time Gold always outperforms? 

Attachment 2 displays the GDX (VanEck Vectors Gold  Miners ETF), the largest ETF investing in gold mining shares. The washout to around US$ 33 is probably the low in this short-term correction. The Relative Strength (upper chart) and the MACD (lower chart) have turned up. What we need here is a bottom formation over the next few weeks.

 

Attachment 3 shows where some gold producers are selling vs. implied premium/discount to spot gold.
 
Only B2Gold (BTO) is selling at a premium, while Lundin Gold (LUG), Pretium Resources(PVG) and Kirkland Lake Gold (KL) are close to neutral. All the rest are selling at a discount, and some at a heavy discount. The red figure represents the average, currently close to a 20% discount.
 
PG=Premier Gold, 
AR=Argonaut Gold, 
OGC=Oceana Gold,
KNT=K92 Mining, 
TXG=Torex Gold, 
GAU=Galiano Gold,
NGD=New Gold, 
CG=Centerra Gold, 
SSRM=SSR Mining,
EQX=Equinox Gold, 
DPM=Dundee  Precious Metals, 
AGI=Alamos Gold, 
GSS=Golden Star Resources.
 
The upper percentage figure is historically the high, and the lower percentage figure historically the lower level of trading in relation to the spot gold price. The blue diamond is the current status. 

(Source Scotiabank)

Attachment 4 shows the Point&Figure chart of the Philadelphia Gold &Silver Index (XAU). Contrary to the ARCA Gold Bugs Index (HUI), XAU also includes silver shares. It is used as a benchmark for gold funds to compare performance. The chart shows the sideways correction since August  (8 red figure).
 
 Attachment 5 displays the holdings.
 
It should always be remembered that at the heart of any successful strategy, is to buy low and sell high. Currently, we’re still in the Buy Low point of this Precious Metals Bull Market. 

____________________________________________________

MasterMetals

@MasterMetals