VIDEO — Brien Lundin: Gold Price Doesn't Make Sense, Tipping Point for the Fed

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Gold fell to just below US$1,815 per ounce this week ahead of the US Federal Reserve's meeting.

Unable to maintain its highest level of the year — more than US$2,000 in early March — the precious metal has been trading with volatility and at a lower price than might be expected given the current market conditions.

Speaking with the Investing News Network (INN) at this year’s Prospectors and Developers Association of Canada (PDAC) convention, Brien Lundin of Gold Newsletter said the current gold price doesn’t make sense.

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At this year's PDAC convention, INN sat down with Brien Lundin of Gold Newsletter to get his thoughts on investing in gold today.


What Do Experts Think About Goldman Sachs' Lithium Oversupply Call?

Last week, the lithium market was shaken by a report from investment bank Goldman Sachs (NYSE:GS) saying that the bull market for battery metals was over for now.

Prices for lithium, which increased more than 400 percent in the past year, are expected to drop in the next two years, with a “sharp correction” happening by 2023, according to Goldman Sachs analysts.

They project that lithium prices will fall from current levels to an average of just under U$54,000 this year, from an average of above U$60,000. By 2023, the bank forecast is for an average price of just over US$16,000.

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Experts in the field weigh in on Goldman Sachs' lithium oversupply call and whether they think it accurately depicts what's happening in the market.


Lithium Prices Stabilize, Supply Risks Ahead

Lithium prices climbed over 400 percent last year, with other key battery raw materials such as cobalt and nickel also seeing prices rally as demand from the electric vehicle (EV) industry picked up pace.

But by the end of the first quarter, prices started to stabilize as demand took a breather, particularly in China, where the government has imposed lockdown measures to contain a new wave of COVID-19.

“We expect lithium and cobalt prices to peak this year, from dented but still strong demand and supply chain challenges,” Alice Yu of S&P Global Market Intelligence said at a recent webinar.

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Experts believe the positive long-term outlook for electric vehicles means lithium demand’s breather could just be temporary.


Copper Supply to Catch Breath in 2022 Before Heading for Significant Deficit

Copper prices have been on the rise since last year, reaching a fresh all-time high in early March at US$10,674 per tonne, partially on the back of concerns over low inventory levels.

In the short term, demand may rise in 2022, but still come in lower than supply. Top consumer China’s growth seems to be taking a pause, and supply for the red metal is forecast to increase, supported by a recovery in mine output, expansions and new projects expected to come online later this year.

Looking longer term, the picture gets tighter — almost half of global copper supply is used in construction, but demand from sectors like electric vehicles and energy storage has increased investor interest in the base metal.

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Copper supply is expected to increase this year, but will it be able to keep up in the long term? Experts are forecasting a major shortage in the years ahead.


Nickel Price Hits Record US$100,000 on Short Squeeze, LME Suspends Trading

Nickel doubled in price to hit a record level of US$100,000 per tonne before the London Metal Exchange (LME) decided to suspend trading on Tuesday (March 8).

The base metal, used mainly in stainless steel, but gathering attention for its use in electric vehicle batteries, was up an unprecedented 250 percent in two days on the back of a short squeeze.

The largest-ever move on the LME kicked off as investors' worries over supply climbed following Russia’s invasion of Ukraine. Russia is a top nickel-producing country.

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An unprecedented increase in nickel prices pushed the London Metal Exchange to halt nickel trading.

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