Metals Heat Up; New Buys
As we alluded to in this week’s report, the major industrial metals are improving with copper showing the greatest relative strength. We have added some new positions to the portfolio in light of this strength, and here we’ll highlight the latest ones.
Led by the recent surge in platinum and palladium, gold is showing strength today and has broken out above some key short-term trend lines. Gold was virtually ignored by investors all summer due mainly to the rising Treasury yield threat, but the realization that inflation is here to stay is attracting some safe-haven and value-oriented buying.
With our favorite gold-tracking ETF, the GraniteShares Gold Trust (BAR), back above its 50-day line it’s time to do some nibbling in the event gold prices surge ahead in the coming weeks on mounting inflation fears. To that end, participants can purchase a conservative position in BAR here using a level slightly under 17.35 as the initial stop-loss (intraday basis). BUY A HALF
Copper is continually heating up as China-related fears fade and low exchange inventories become a concern. Hedge funds were basically washed out of the market, which suggests copper is sold out technically and likely has some additional room to rally.
On the copper front, we recently added Taseko Mines (TGB) after this week’s breakout above the 2 level (per instructions in recent reports). Taseko has turnaround potential and has established a nice-looking base in recent months from a chart perspective. BUY A HALF
After a recent hiccup, the market for lithium producers is on the upswing again as demand for electric vehicles continues to expand and the need to secure mining resources is a hot-button issue right now, particularly for China. In view of this, I’m adding a new lithium name to our portfolio.
Livent Corp. (LTHM) is the largest U.S. lithium-only miner, providing a range of lithium-based products and serving the EV, chemical, aerospace and pharmaceutical industries. Revenue and earnings projections for Livent are strongly optimistic for the next several years, with analysts expecting top-line growth of 34% this year and around 20% next year, while earnings are projected to grow at an even faster pace. Participants can buy a conservative position in LTHM here using a level slightly under 22.25 as the initial stop-loss. BUY A HALF
