Resource Investors Face Reality Check – Weekly Recap May 31st
Last week was a rollercoaster ride for resource investors as commodities and resource stocks that were at all-time highs suddenly took a sharp dive towards the end of the week. The trigger? U.S. Fed comments reiterating their stance on higher interest rates.
Resource investors experienced a “reality check” as markets that were once on a linear growth trajectory turned exponential, leading to a sudden sell-off. This phenomenon, while scary, can also present buying opportunities if the fundamentals remain strong.
Uranium stocks saw a surge, with Denison Mines Corp. and Cameco Corporation reaching new highs. Silver rebounded to an 11-year high, benefiting companies like Endeavour Silver Corp. and Pan American Silver Corp. Bravo Mining Corp. also saw a significant increase after releasing positive assay results.
On the flip side, i-80 Gold Corp. hit an all-time low, while Collective Mining Ltd. and Fortuna Silver Mines Inc. reached new highs. Natural gas prices climbed to a 6-month high, and ConocoPhilips announced a multi-billion-dollar acquisition of Marathon Oil Corp.
In the energy sector, AltaGas Ltd. and Royal Vopak greenlit a $1.35-billion energy export facility in Prince Rupert, BC. Meanwhile, the Baker Hughes Petroleum Rig Count remained steady in the U.S. while Canadian rigs saw an increase.
Lithium and forestry stocks faced challenges, with Century Lithium Corp. and Lithium Americas Corp. hitting new lows. The NASDAQ Exchange reached an all-time high, and the CRB Commodities Index rose to a 2-year high.
Despite market fluctuations, the TSX Venture Exchange remained in the green as more conservative investors navigated interest rate concerns. Across the board, major indexes saw losses, with the DJI, S&P 500, NASDAQ, TSX, and TSX Venture experiencing declines.
In the currency and commodity markets, the Canadian dollar strengthened, while gold, silver, copper, and lithium saw mixed movements. Crude oil prices dipped, while natural gas and uranium rose. Soft commodities like lumber also faced a downward trend.
In a surprising turn of events, the University of Calgary announced the reopening of its oil & gas engineering program, showcasing the cyclical nature of the energy industry. As markets continue to evolve, investors are advised to conduct thorough research and seek professional advice before making investment decisions.