Top Stories This Week: Gold Holds Above US$1,800, Copper Breaks Records

Gold spent time around US$1,845 per ounce this week, supported by concerns about inflation.

Those worries came after the release of Consumer Price Index data. According to the US Department of Labor, the index, which tracks a basket of goods, as well as energy and housing costs, rose 4.2 percent year-on-year in April, marking its fastest pace in 12 years. A weaker US dollar also helped gold.

Experts remain optimistic about gold’s future prospects, and I recently spoke with Ed Moy of Valaurum, who believes it should reach the US$2,000 to US$2,100 level by the end of the year. Why? His perspective is that when premiums are taken into account, buyers are already paying that much for gold.

“So even though the spot price is well below (US$2,000 to US$2,100), to me the real price of gold is what the market is willing to pay for it — and they’re willing to pay up to US$2,100” — Ed Moy, Valaurum 

Ed is a former director of the US Mint, and the conversation is definitely worth a listen — he also discusses silver, and efforts to make gold and silver legal tender in a number of American states.

Stepping away from precious metals, I think it’s important to take a moment to touch on copper, which has been in the spotlight for the last couple of weeks as it surges to new all-time highs. The red metal’s latest major move came this week, when it topped US$4.90 per pound for the first time ever. 

Copper is a key metal in construction, and its rise has been linked to factors such as higher Chinese demand and supply-side concerns. However, the base metal is increasingly becoming known for its green energy properties. Among other things, copper is used in electric vehicles, as well as in electric vehicle charging infrastructure and energy storage applications.

With copper in mind, we asked our Twitter followers if they think its high price levels are sustainable. “Yes” was the clear answer, with nearly 75 percent of respondents replying in the affirmative. 

We’ll be asking another question on Twitter next week, so make sure to follow us @INN_Resource or follow me @Charlotte_McL to share your thoughts.

Staying with the green energy theme, we’re going to end this week on battery metals.

INN’s Priscila Barrera talked to Chris Berry of House Mountain Partners, who shared his ideas on what makes today’s lithium and cobalt price increases different from the rise seen back in 2017 and 2018. 

Chris explained some of the trends that were in progress at that time have gotten stronger — for example, batteries keep getting cheaper. Meanwhile, COVID-19 has pushed clean energy conversations globally, and we’re also now seeing more of a focus on supply chain independence from China.

“I think that probably the two biggest catalysts today relative to 2017 were the US/China trade war and … an awakening of supply chain dependence, number one. 

And of course, COVID is the other really large shock to the global economy. That is more than anything I think really responsible for all of this discussion these days around stimulus and around the greening of the global economy” — Chris Berry, House Mountain Partners

With prospects looking bright, how can investors pick winners in the battery metals space? Chris recommended looking at companies with partnerships and assets at the low end of the cost curve.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.