Precious Metals

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

After last week’s move to nearly US$1,800 per ounce, this week brought ups and downs for gold.

The yellow metal moved between about US$1,760 and US$1,790 during the period, and was around US$1,790 at the time of this writing on Friday (October 22) afternoon.

Fears about inflation continue to loom large, and not just in the US — news hit this week that Canada’s inflation rate reached an 18 year high in September.

Even so, gold isn’t as high as many market watchers would like, and at this point experts are pointing to November’s US Federal Reserve meeting as a possible catalyst for the yellow metal.

Speaking of the Fed, questions are being raised about Jerome Powell’s path forward as chair after it was revealed he sold between US$1 million and US$5 million in a broad-based stock index fund last October.

Rules for officials at the central bank have now been tightened up, and while opinions are divided on whether Powell’s actions are problematic, it remains to be seen whether he’ll be nominated for the position again. His term as Fed chair will run out this coming February.

With gold in mind, we asked our Twitter followers where they think sentiment is at in the space right now. By the time the poll closed, responses were split fairly evenly between positive, neutral and negative, although positive had a slight lead with about 40 percent of the vote.

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.

This week I also want to take a moment to look at what’s going on in the zinc market.

The base metal soared to a 14 year high earlier this month, and INN’s Priscila Barrera reached out to experts to find out what’s behind the rise and whether it will last.

Zinc’s price jump comes after Nyrstar (EBR:NYR) announced plans to reduce production by 50 percent at three of its operations in Europe; together, they have a capacity of about 700,000 tonnes per year.

“Significant increases in the cost of electricity in recent weeks, and the cost burden of carbon emitted by the electricity sector which is passed on to industrial and domestic customers, mean it is no longer economically feasible to operate the plant at full capacity” — Nyrstar

The company blamed the cuts on “significant increases in the cost of electricity,” as well as costs associated with carbon emissions.

For now, analysts believe it’s too soon to tell exactly how the situation will play out. Questions to consider include whether Nyrstar makes other changes, such as shutting down concentrate roasters at any of the three smelters, and whether other companies in Europe follow Nyrstar’s lead with their own cuts.

“If it is just a case of cutting power consumption to the tankhouses at times of peak power and the company’s five roasters remain operating, then this may only amount to a small cut, of say a few thousands tonnes of slab zinc production per month” — Jonathan Leng, Wood Mackenzie

Zinc remained elevated at the time of this writing, trading at around US$3,500 per tonne.

Finally, INN’s Bryan Mc Govern looked this week at challenges facing cannabis researchers.

The market participants he spoke to pointed out that most cannabis investors are still focused on making money quickly and don’t want to stay in the space long term — as a result, they’re less interested in companies that are working on medical research, which moves notoriously slow.

Executives at Tetra Bio-Pharma (TSX:TBP,OTCQB:TBPMF) and Lexaria Bioscience (NASDAQ:LEXX) said it’s been tough to explain their business model to investors who expect a more fast-moving path.

“Our achievements that would normally be interpreted as being ‘very major’ in the drug world are not understood by our shareholders because they came in thinking we were going to be a fast buck and we are not” — Dr. Guy Chamberland, Tetra Bio-Pharma

But there’s hope for the future — Jazz Pharmaceuticals’ (NASDAQ:JAZZ) acquisition of GW Pharmaceuticals has sector participants hoping that it won’t be long before life science heavyweights open their pocketbooks to cannabis.

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: Lexaria Bioscience is a client of the Investing News Network. This article is not paid-for content.

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.

MARKETS

Markets
TSX20485.66-39.79
TSXV599.20+0.02
DOW34429.88+34.87
S&P 5004071.70-4.87
NASD11461.50-20.95
ASX7301.50-52.90

COMMODITIES

Commodities
Gold1798.03+0.31
Silver23.16+0.01
Copper3.85+0.04
Palladium1903.84+9.31
Platinum1019.77+1.78
Oil80.34-0.88
Heating Oil3.18-0.09
Natural Gas6.22-0.52

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