The gold price traded within a US$25 range this week, rising as high as US$1,930 per ounce at the beginning of the period and falling as low as US$1,906 later on. It was around US$1,926 at the time of this writing on Friday (July 7).
The US Federal Reserve was in the headlines once again with the release of the minutes from its June meeting. Rates were left unchanged at 5 to 5.25 percent at that gathering, but the minutes show almost all officials believe additional increases will be necessary in the future. They also indicate that some committee members were in favor of hiking by 25 basis points last month.
These Fed meeting takeaways will come as no surprise to those who have been following the central bank’s recent movements, as well as comments from Chair Jerome Powell — he’s said consistently that there’s more work to be done in the fight against inflation. The June pause is intended to allow some digestion of the Fed’s 10 consecutive bumps.
It’s worth noting that the Fed is still anticipating a recession later this year, although it expects it to be mild, with a “moderately paced recovery” to follow. The central bank is set to convene again from July 25 to 26.
Rick Rule on when uranium stocks will move
As we wrap up, I want to highlight the interview I did this week with Rick Rule of Rule Investment Media. We’ll be posting the full conversation next week, but for now I want to share his comments on uranium. Pointing to the contrast between the spot price and volumes in the term market, Rule said he thinks we’re in a “stealth bull market.”
He also spoke about what it will take for uranium equities to start moving, acknowledging that most stocks aren’t faring as well as major miner Cameco (TSX:CCO,NYSE:CCJ), which is up about 25 percent year-to-date.
Here’s how Rule explained it:
What I think you’re going to begin to see is not just the Camecos of the world, but rather the second-tier uranium companies, beginning to sign five to seven year term marketing contracts at prices that are high enough to allow them to establish new production or put mothballed production into place. And I think that is when the industry really, truly begins to rebound — that is where the equities prices rebound” — Rick Rule, Rule Investment Media
Rule will be hosting the Rule Symposium in Boca Raton, Florida, from July 23 to 27, and it will be a great chance to hear more from him either in person or via livestream. The INN team will be attending as well, so say hello if you see us!
Want more YouTube content? Check out our expert market commentary playlist, which features interviews with key figures in the resource space. If there’s someone you’d like to see us interview, please send an email to cmcleod@investingnews.com.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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