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Commodities: Gold and Zinc Crush it in Q1, Energy Gets Smoked

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Presented by:  First Mining Finance

Commodities: Gold and Zinc Crush it in Q1, Energy Gets Smoked

Commodities: Gold and Zinc Crush it in Q1, Energy Gets Smoked

The start of 2016 has been a roller coaster for investors.

Global markets had their worst ever start in the first trading days of the year, with the S&P 500 eventually shedding 10.5% by early February. Stocks have rebounded since then, but tension is still in the air with record longs on the VIX Volatility Index.

Precious Metals
For this reason, among many others, investors piled into precious metals in Q1 of 2016. Gold finished up an impressive 15.9%, buoyed by record buying in gold ETFs. Meanwhile, silver and platinum, which are considered precious metals with more industrial uses, were also up in Q1 to a lesser extent: 9.4% and 6.6% respectively.

Base Metals
Base metals were all over the map in the first few months of the year. Zinc shot up a surprising 20%, though it has been overdue for a bounce back since hitting five-year lows in 2015. Nickel and copper, however, did not perform as admirably. Nickel was in negative territory (-3.1%) and copper ultimately ended up flat, despite a large rally in February and early-March.

Energy
The energy sector had no real winners, with WTI crude, natural gas, and uranium all ending up in the red. Natural gas was the worst of these with a steep -17.0% drop as it continues to eye multi-decade lows. Some analysts expect more downward pressure on natural gas now that the quantity of gas in storage is 34.2% higher than the five-year average.

Food
The world’s key agricultural commodities were a mixed bag in terms of performance. Soybeans jumped 4.2% in value, but wheat (1.0%) and corn (-0.3%) only had subtle changes in prices.

With many looming questions for Q2, we’re sure that our next quarterly update will be just as eventful. Concerns around a potential Brexit, negative interest rates, stagnating manufacturing, and a potential U.S. rate hike could make for a particularly interesting time period.

Chart presented by: First Mining Finance Corp.

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Mining

An Investor’s Guide to Copper in 3 Charts

Explore three key insights into the future of the copper market, from soaring demand to potential supply constraints.

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An investor's guide to copper in 3 charts

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The following content is sponsored by iShares

An Investor’s Guide to Copper

Copper is the world’s third-most utilized industrial metal and the linchpin of many clean energy technologies. It forms the vital connections in our electricity networks, grid storage systems, and electric vehicles.

In the above infographic, iShares digs into the forces that are set to shape the future of the copper landscape.

How Much Copper Do We Need?

Copper is poised to experience a remarkable 54% surge in demand from 2022 to 2050.

Here’s a breakdown of the expected demand for copper across clean energy technologies.

Technology2022 (kt)2050P (kt)
Electricity networks43648862
Other low emissions power generation93.7142.2
Solar PV756.81879.8
Grid battery storage24.6665.2
Wind453.5 1303.3
Hydrogen technologies-0.22
Electric vehicles370 3582.9
Other uses19766 22382

Copper is vital in renewable energy systems such as wind turbines, solar panels, and electric vehicle batteries because of its high electrical conductivity and durability.

It ensures the effective transmission of electricity and heat, enhancing the overall performance and sustainability of these technologies.

The rising demand for copper in the clean energy sector underscores its critical role in the transition to a greener and more sustainable future.

When Will Copper Demand Exceed Supply?

The burgeoning demand for copper has set the stage for looming supply challenges with a 22% gap predicted by 2031.

Given this metal’s pivotal role in clean energy and technological advancements, innovative mining and processing technologies could hold the key to boosting copper production and meeting the needs of a net-zero future.

Investing in Copper for a Prosperous Future

Investors looking for copper exposure may want to consider an ETF that tracks an index that offers access to companies focused on the exploration and mining of copper.

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