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A P R I L / M A Y 2 0 1 7 www.resourceworld.com 19 At the Market by Rodney Blake The PDAC curse – just a coincidence? D amned if it didn't happen again! Just as spring follows winter – the so-called curse of PDAC once again killed the New Year's run up in commodities and resource stocks that takes place around the time of the annual Prospectors & Developers Association of Canada (PDAC) convention in early March in Toronto. And while the curse is usu- ally expressed tongue-in-cheek with some frustration, there is some factual reality to a correction at this time of year. Of course, it has nothing to do with PDAC. This year the TSX Venture Exchange, the best barometer of commodity prices and resource stocks, rose nicely from 717 in late December to a high of 845 on February 21. From there it took an abrupt three-week slide to a low of 789 on March 9 which put an immediate damper on what was shaping up to be a very good start to the year. This year's PDAC was from March 5-8. Is this simply a coincidence? Let's dig deeper. Gold bullion had a similar chart pattern to the Venture Exchange. It rose from a low of US $1,132/oz in late December to a high of US $1,259 in late February, and from there it fell to a low of US $1,201 on March 10. Similarly, copper went from US $2.48/ lb to US $2.78 in the same time period and then quickly fell to US $2.58 three weeks later. Petroleum fared no better as crude oil – that had held steady in the US $52 - $54/ bbl range since mid-December – suddenly fell to US $48.35 by mid-March. It seems reasonable to expect that when three heav- ily weighted commodities fall in unison so quickly that their corresponding trading platform would fall as well. No doubt this year's sudden drop in resource prices was also weighed upon by the US Federal Reserve's much anticipated hike in interest rates and the corresponding effect on the US dollar. Going into the Fed's March 15 meeting, the market had built in a 100% certainty that there would be another 0.25% hike in US interest rates. This surety resulted a very strong US dollar and a cor- responding drop in commodity prices. This rise in the greenback must have been over- done – for in the two hours after the Fed confirmed their interest rate hike – the dol- lar reversed lower, as gold bullion rose by $18.40 to US $1,220, copper gained $0.034 to US $2.67, crude oil improved by $1.02 to US $49.38 and the Venture Exchange closed up by over 14-points to 807. 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 accu- racy and completeness of the information 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 current as of the date appearing in this article, we do not assume any obligation to update the information or advise on further devel- opments 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 respective directors, officers and employees and their asso- ciations, 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.com