Should we buy the current sell-off in Gold and Copper stocks?
Evolution Mining (EVN) is trading down 5.6% by Friday lunchtime, now ~17% below Monday’s all-time high. Both gold and copper stocks are under pressure as rising bond yields weigh on the sector, with the Iran conflict pushing oil prices higher and fuelling concerns inflation could reaccelerate, potentially forcing central banks to keep policy tighter for longer. The past 24 hours has seen aggressive selling across global copper names, reflecting fears that a prolonged Middle East conflict could weigh on global growth.
MM recently flagged the potential weakness in both gold and Cu names, and we sold our Newmont (NEM) position earlier in the week – our best guess is NEM has a further ~10% downside on top of this week’s 14% fall.
We intend to re-establish gold exposure in the coming weeks or months, while potentially adding to copper exposure should more attractive entry levels emerge, with Evolution Mining (EVN) a likely candidate.
- MM is considering accumulating EVN between $12.50 and $14 assuming markets follow our expected path.
