Markets

Gold, Lithium Stocks Shine

Mining stocks were the big winners in Australia on Friday, with lithium plays Orecobre (ORE.AU) and Galaxy Resources (GXY.AU) standout performers for the week.

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Galaxy Resources topped the S&P/ASX200 Index with a 7% advance on Friday, bringing its gain for the week to 15%. Orecobre's 1.6% rise brought its advance for the week to 19%. Both companies reported profits during the week, with Orecobre offering an upbeat outlook for lithium carbonate prices.

Gold stocks were also strong performers, with Newcrest Mining (NCM.AU) - the world's fourth largest gold producer - advancing nearly 2%. Independence Group (IGO.AU), which also produces nickel, rallied 4.8%.

Gold miners were boosted during the week by the yellow metal's move above $1,300 an ounce after North Korea elevated tensions in North Asia by firing a missile over Japan.

Gold was trading around $1,320 an ounce in late Asian trading on Friday, with the metal boost by comments from U.S. Treasury Secretary Steven Mnuchin talking down the U.S. dollar.

However, RBC Capital Markets reckons it may be hard for gold to push higher from here:

Last week we said that it would take a hefty risk to break gold out of its challenge zone, and while a confluence of factors drove it higher on Monday when it breached the $1300/oz level, North Korea risks have kept it elevated since. Unless the North Korea situation deteriorates further, we think there is
Admittedly, there is support for current prices in the near-term, but unless the fundamental macro backdrop deteriorates (i.e. a significant correction in equities, dollar, rates, etc.), gold will struggle to make gains that are both significant and sustained from current levels. While we still think that the

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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