Brien Lundin, Editor of the Gold Newsletter, joins us to share his thoughts on the recent rollercoaster moves in the in the commodities sector and the precious metals, based on the war premium coming out, but the Fed rate hiking cycle kicking off to fight higher persistent inflation. Brien mentioned that he felt the pullback and consolidation in gold was expected and healthy, and is still very constructive on this move higher having much further to run longer term, and that the monetary and fiscal issues are going to regain dominance as the primary driver of the precious metals sector.
We discuss that there are a few things that could continue to pressure gold from a stronger resolution in Ukraine, to shorts defending their positions, but that so far the rebound in the sector and strength in the metals and miners has been the kind of bullish move that was anticipated on the back of the Fed rate hike announcement. The conversation then turned to how high and how many hikes the central bank will be able to make, and if they get to a breaking point, if they may go to other policy tools like yield curve controls or even negative interest rates down the road.
Next we shift over to that potential that more generalist investors are now focused on the commodity sector, and more people are waking up to the importance of supply chains and domestic raw materials. These leads to the question of if policy makers will help mining companies with permitting to get more projects expedited, permitted, and into production. We wrap with a discussion on 2 mining stocks that Brien likes at present and where he’s see the growth opportunity: Zacapa Resources (TSX.V: ZACA) and Trigon Metals (TSX.V: TM)