The gold price pulled back this week, spending time below US$2,000 per ounce.
Sector experts continue to present bullish long-term predictions, but it’s worth noting that the US Federal Reserve’s next meeting may impact the yellow metal in the short term — the gathering is set to run next week from May 2 to 3.
One unusual sentiment indicator when it comes to gold may be the recent heist at Toronto’s Pearson International Airport. In a major theft, $20 million worth of gold and other valuable items were stolen from a holding cargo facility after being unloaded from a plane. The shipment was reportedly being coordinated by the Brink’s Company (NYSE:BCO).
The robbery happened last week, but details are still scarce — we don’t know where the gold was coming from, and we don’t know who the buyer was. We also don’t know whether the thieves were hoping to take advantage of gold’s current high price levels — but the Investing News Network team will be keeping an eye out for future updates.
Chile surprises with plan to nationalize lithium industry
Also in focus this past week was Chile’s decision to nationalize its lithium industry. Chile is the world’s second largest producer of the battery metal, with output of 39,000 metric tons last year, and it also holds the largest reserves globally.
“This is the best chance we have at transitioning to a sustainable and developed economy. We can’t afford to waste it” — Gabriel Boric, president of Chile
Chile’s plan is for state-owned copper producer Codelco to take the lead on setting up a national lithium company. Codelco will also be in charge of negotiating with top lithium producers Albemarle (NYSE:ALB) and SQM (NYSE:SQM). Their contracts expire in 2043 and 2030, respectively, which means they’ll need to determine how they will work with Chile before then. In the future, lithium contracts will only be awarded as public-private partnerships with the state.
Both Albemarle and SQM took share price hits when the news was announced, and market watchers have raised questions about what Chile’s choice means for the future of lithium in the country, especially as electric vehicle companies pay increasing attention to securing supply chains for key raw materials.
“Automakers may be more trepidatious around committing to lithium supply deals from Chile until it’s clear what nationalization will look like” — Caspar Rawles, Benchmark Mineral Intelligence
The move has also generated discussions around lithium production technologies given that Chile wants to shift from evaporation ponds to direct lithium extraction as a way to reduce the environmental impact of the mining process.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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