Q2 2019 Metals And Mining Quarterly Review
Noble Capital Markets
Mining companies (as measured by the XME) declined 4.4% during the June quarter versus a 3.8% increase in the S&P 500 Index. Notably, after posting 2.9% and 15.4% declines in April and May, the XME rose 16.3% in June on the back of higher gold prices which rose 8.0%. During the first half of 2019, the XME was up 8.4% but still lagged the S&P 500 Index which appreciated 17.4%. During the second quarter, the price of gold increased 9.1%, while silver increased 1.3%. Futures suggest gold above $1,400 an ounce in 2020, with silver prices in the mid- $15 range. The gold/silver ratio was 92.0x at the close of the quarter and we still maintain our view that silver is undervalued relative to gold and thus could represent greater long-term price appreciation potential.
Among base metals, copper and lead fell 7.8% and 5.3% during the second quarter, while zinc eked out a 1.3% gain. During the first half of 2019, gold was up 9.9%, silver declined 0.9%, copper rose 3.0%, lead fell 4.7% and zinc was down 0.9%. What can investors expect for the remainder of 2019?…
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