All Eyes Are on Lithium

Source: Barry Dawes 08/15/2023

Barry Dawes of Martin Place Securities takes a look at current movements in the gold and lithium market.

Diggers and Dealers 2023

• Attendance down in 2022 but still an important showcase
• Big improvements coming for the gold sector market leaders
• Excellent progress by many juniors

Gold

• Still heading to US$2000 and beyond
• Seasonal influences strong
• Building quietly
• May be more short-term softness but technicals positive
• Conviction elusive

US$ Still Strong

• U.S. is very attractive investment destination!
• Downtrend broken!
• Yen makes new 2023 low
• Swiss Franc about to crack

Bond Market

• U.S, bond yields peaking
• But Japan, Germany, and UK yields to rise
• Is this being too complicating?

Japanese bonds have had a disaster!

A 60% increase in yield on a long-dated bond to 0.58% would have cut the price by >50%!

Yields to 0.8% and then 1.2% would be catastrophic. Junk status for these and the Yen.

UK

Yields are likely to break higher.

It could be a big move, but the uptrend is broken.

Eurozone

Yields definitely rise here.

Yield rises on long-dated low-coupon bonds are devastating.

Gold

Gold has given us another month of misery after what we thought was going to be a seasonal low around the end of June.

The US$ is strengthening again as the world embraces the ending of the period of control by the criminal mafia in the U.S. The U.S. will become the recipient of massive investment capital inflows as these criminals are removed, and the rule of constitutional law is regained.

The electoral fraud that we’ve talked about over the last few years is now coming to the fore in a crescendo. If you haven’t watched this interview with Dr. Jan Halper-Hayes, you should do so now.

Some interesting background:

She was on the Trump Transition Team in 2016/17 and sits on a U.S. Dept Defence panel, so she has standing.

Note at 10:02, Dr. Halper talks about the repatriation of a large amount of gold stolen from the U.S. Treasury and held by the Vatican.

650 plane loads were involved.

This is the first formal announcement of this action I have seen and follows several hints over the past few years.

The tonnages are large (> several thousand tonnes!), so the US$ may be, in fact, already gold backed.

You will recall videos of Trump looking very happy and the Pope looking very angry during a visit to the Vatican in 2017.

Video

The world is recognizing this, and funds are flowing into the US$.

The world is also seeing the junk status of other currencies like the Yen and the Euro, and even the Swiss franc, and is leaving.

Note the weakness in the bond markets in these countries.

However, it seems the commentators are thinking about just the opposite.

Heed the markets!

The gold-backed BRICs issue will be reviewed later this week.

What can we say about gold now?

It is friendless, and the sentiment is awful.

Gold company booths at Diggers were almost ignored last week.

So here is gold’s action over the past month.

Heading lower, but it’s wedging!

This wedge is playing out here and looks constructive with horizontal support.

This is an interesting uptrend here with some good horizontal support.

And the parabola for US$ gold is still there.

Gold in Yen is still rising.

Gold in Euros is holding there too.

Gold Stocks

• Leading gold stocks building steadily
• Horizontal support is good
• Uptrends are wonky but still OK

Still hanging in there.

But sentiment has collapsed again.

ASX Gold Stocks

Last week I managed to catch up with about 40 ASX gold companies at Diggers.

The big stocks are looking very strong.

I also, courtesy of NST (thank you, Stu, Bec, and Sophie), visited the KCGM Super Pit and was astounded by the progress and the direction of this operation.

No wonder NST was so keen to get control of this operation.

I will do some work on this later in the week, but clearly, NST is heading for something brilliant here. It will be >1mozpa, above their conservative 900koz pa, from this expansion from 13mtpa to 27mt, which is underpinned by the existing 120mt of 0.7g/t low-grade stockpiles by 2029. A$1.5bn being well spent!

Jundee and Pogo are also doing very well.

EVN has now turned the corner and is looking much better at Red Lake, and Mungari is now being expanded.

RRL, GOR, RMS, PNR, WGX also are strong.

GMD looks as though it will now start really growing.

DEG just gets better every quarter.

BGL is just out of this world!

ASX Gold Index

• Pulled back to horizontal support
• Completing RHS
• Small-cap developers bottoming
• Small-caps developers about to outperform XGD

ASX gold stocks rallied nicely in June but have pulled back to important horizontal support around 6600.

The index is still doing work after testing that 7700 neckline.

Still looking quite constructive despite being still about 30% below the 2020 high.

The index broke a downtrend line this morning and is just backtesting.

There is a wedge here as well.

The underlying corporate fundamentals are very strong and are turning up after a pause.

We can’t have a bear market if output and earnings are rising.

The small gold developers, however, were almost ignored at Diggers last week.

Lithium and rare earths were the flavor of the month.

But do watch this mega wedge going back to 2020.

These small-cap developers are ready to break out.

And they are beginning to break out vs. the Gold Index.

Stocks to watch:-

• AAR
• AUC
• AUT
• BC8
• GBR
• OBM
• GCY
• AME
• KZR
• SGN
• RXL

More is coming later this week.

Timing is everything.

Heed the markets, not the commentators.

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asx
gold
lithium
rare earths