Top Stories This Week: Gold Drops on Vaccine News, Breaking Down Altura’s Fall

- November 13th, 2020

Catch up and get informed with this week’s content highlights from Charlotte McLeod, our editorial director.

The gold price was in focus in the resource space this week, taking a steep drop on Monday (November 9) on the back of coronavirus vaccine news from Pfizer (NYSE:PFE).

The yellow metal plunged about US$100, dropping from around US$1,960 per ounce to US$1,860. 

I had the chance to check in with Lobo Tiggre of Independent Speculator, who said he had anticipated that vaccine news could lead to a drop in the gold price. Encouragingly, he doesn’t think the fall will last — Lobo explained that the yellow metal was on an upward trajectory before COVID-19 hit, and while the virus has been a tailwind, it’s not the main thing driving gold.

“(Gold’s price rise) started way before COVID-19, and maybe the COVID panic is an extra boost, a tailwind — but the disappearance of the tailwind doesn’t undo the fundamental situation for the market. I remain extremely bullish” — Lobo Tiggre, Independent Speculator

More important factors of course include widespread global economic difficulties.

The same applies to the US election, which Lobo said could provide short-term volatility for gold, but should not be considered a reason to panic.  

Outside the gold space, INN’s Priscila Barrera examined the downfall of Altura Mining, which entered receivership at the end of October. The company was a lithium producer in Western Australia, but ran into problems — Benchmark Mineral Intelligence estimates that its total costs were in excess of US$400 per tonne, much higher than today’s spodumene price. 

“While much of the investment community has been hesitant to invest in the lithium space in recent years … those that act now will like see themselves the dominant force for the next growth cycle, capitalising on the rapidly growing industry and move to higher pricing” — Benchmark Mineral Intelligence

What does that mean for Australia’s lithium industry? While some companies in the country have struggled, it remains the world’s top producer of lithium and is key for the market. Experts are confident that future demand for lithium from the electric vehicle space will support the space moving forward.  

As for Altura, it’s entered into a conditional agreement to be acquired by neighbor spodumene producer Pilbara Minerals (ASX:PLS) in a deal worth US$175 million.

Going back to gold, we asked our Twitter followers this week how much a COVID-19 vaccine could impact the metal once it’s announced. Most said in the long term they don’t see it having a major effect, and a number of respondents said they see overarching worldwide problems like debt as more pressing. 

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.

In the cannabis space this week, INN’s Bryan Mc Govern continued covering the US election, asking two market watchers what the event could mean for the space.  

Kacey Morrissey of New Frontier Data and Matt Carr of the Oxford Club were both happy to see legalization programs approved in five states (Arizona, Mississippi, Montana, New Jersey and South Dakota), but said they don’t expect full federal legalization under a Biden presidency.

“Even if they do a federal decriminalization, we don’t see there being federal legalization or an implementation of anything that would then create a sort of interstate commerce” — Kacey Morrissey, New Frontier Data

That’s an idea that we’ve been hearing throughout the election process, although both experts were able to expand — Kacey suggested that federal decriminalization could happen, while Matt said the success of state programs might actually end up deterring a federal movement.

Want more YouTube content? Check out our YouTube playlist At Home With INN, which features interviews with experts in the resource space. If there’s someone you’d like to see us interview, please send an email to cmcleod@investingnews.com.

And don’t forget to follow us @INN_Resource for real-time updates! 

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.

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