Resource World Magazine

A P R I L / M A Y 2 0 1 9 www.resourceworld.com 25 At the Market by Rodney Blake A s we enter the key second quar- ter of 2019, I thought it might be of interest to look back on the resource markets for the first quarter to see how they have performed and to get some perspective as to how they might set up for the second quarter and perhaps the rest of the year. Keep in mind that it was in the sec - ond quarter of 2018 when most resource stocks, as measured by the TSX Venture Exchange, started their devastating declines that drove the exchange to a three-year low. Gold bullion started this year well and rose by 5% to about US $1,350/oz but has now settled back down to about US $1,300. This is a similar pattern to last year, but the real test will be through the summer months. Last year gold fell by 10% from April to August before finding support at about US $1,200/oz. This was a major drag on the resource sector and hopefully can be avoided this year. Copper seems to be doing much better. The red metal has gained about 12% in 2019 and looks to be plateauing at about US $2.90/lb. It is important to keep this upward momentum going as copper fell by over 21% from US $3.30 to US $2.60 from early June to mid-July last year – another large drag on the resource indexes. Crude oil is having a very good start to the year. After touching a 1½-year low of US $42.50/bbl in late December, the black gold has steadily gained some 39% in 2019 to near US $59. Again, this upward momentum is important as late last year crude oil broke a multi-month uptrend and plunged 43% from a four-year high of US $74.50 to the above mentioned low. The TSX Venture Exchange – the moth - ership of resource issuers – rose by about 18% to the 635 level by early February this year and has been holding close to that level ever since. Hopefully this opti- mism remains intact as last year. The Venture surged up over 12% in the first week of January, held that level for about a month, and then began the agonizing 40% descent to 530 – a complete momentum failure. It is clear the TSX Venture Exchange closely mirrors the action of the major commodity prices. It rose and fell last year with the price of gold, copper and crude oil. This year it rose once again with these commodities and, so far, has held those advanced levels. The real test will come in the next three to seven months to see if the resources and the Venture can hold these elevated lev - els and better yet – establish a solid base to move higher from later in the year. Of course, a major discovery, area play or a spike up on one or more of the commodi- ties would go a long way to bring back investor interest and move the markets accordingly. But to sum up 2019 to date – I'd say: "So far so good." n Rodney Blake is an Investment Advisors with Canaccord Genuity Wealth Management, a division of Canaccord Genuity Corp, Member- Canadian Investor Protection Fund. The information contained in this article is drawn from sources believed to be reliable, but the accuracy and completeness of the informa - tion is not guaranteed, nor in providing it does Rodney Blake, Canaccord Genuity Corp, or its subsidiaries, or affiliated companies, assume any liability. This information is cur- rent as of the date appearing in this article, we do not assume any obligation to update the information or advise on further develop- ments relating to these securities. This article should not be considered personal investment advice or a solicitation to buy or sell securities. Canaccord Genuity and holdings of its respec- tive directors, officers and employees and their associations, from time to time may buy or sell any securities mentioned herein. The views expressed are those of the author and not necessarily those of Canaccord Genuity Corp. He can be reached at 604-643-7567 or rod. blake@canaccord.comUsual Canaccord/Blake disclaimer So far so good

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