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D E C E M B E R / J A N U A R Y 2 0 1 8
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or the first time in years, optimism
is widespread among metals traders,
brokers and miners, buoyed by a com-
bination of strong growth across the world's
key demand centres, supply curbs in China
and a return of retail investor interest.
This upbeat mood extends to the min-
eral exploration industry, where investor
appetite has been slowly increasing since
late summer 2016 and the smart money
has been willing to play a waiting game.
Mining stocks saw a recovery in the first
half of 2016 and then took a breather.
Last year mineral exploration companies
cashed up, contrarian institutional inves-
tors loaded up and retail investors began
to take profits from the overheated equities
market to reinvest in the mining sector, yet
the bull market remained elusive.
That may be about to change. With an
upswing of US, UK and Asian economies
squeezing metal supply, predictions of a
US equity market correction and a back-
drop of international political uncertainty,
conditions exist to drive more retail and
institutional investors back to the mining
and mineral exploration sector next year.
"Looking at the big picture, the min-
eral exploration market is doing fine," says
Gwen Preston, Editor of Resource Mavin,
an industry investor newsletter. "The start
of this bull market looks the same as previ-
ous bull markets. In 2002 and 2003, it was
a slow grind at first and it took a while to
get going. There are better days ahead but
it takes patience to ride it out."
"The global economy looks much better
than it has done probably since the crisis,
maybe before that," said Saad Rahim, Chief
Economist at Trafigura Group Pte, the
second-largest metals trader. "I'm pretty
bullish."
Yet gold prices have not broken through
nor sustained the US $1,300/oz most trad-
ers believe will mark the start of a bull
market for gold and all eyes are on three
possible catalysts that could push the price
of gold into bull territory.
The smart money is willing
to play the waiting game.
by Robert Simpson
OUTLOOK
2018
MINING STOCKS
