GS Materials August 21...GOLD path higher, EGO your equity pick..... Copper mispriced and FMG's game of snakes and ladders

GS Materials - August 21...GOLD path higher, EGO your equity pick..... Copper mispriced and FMG's game of snakes and ladders

Have been on the move this week, so grabbing a few bits top of mind as I wrestled a back of the buss red eye headache yesterday…Overnight precious keeps the interest intact, trading observes that Chinese buying renewed, they had been taking profits the last few sessions, but today its all one way. They (like us on the desk in london) think Silver is more interesting, less resistance around these levels, just less equity expressions . Iron ore will only go sideways at best, you have BHP asserting that strikes having no impact, more importantly with steel margins compressed and met coal rallying, its hard for iron ore go up….This is worth packing into the back of your head Indonesia, China to Explore Greater Commodity Market Access "Will cooperate on advanced technologies and artificial intelligence, including the joint development of communications satellites". Call me what you will but i suggest below on Copper the mkt has mispriced the Korea/GLEN deal and i also continue to beleive that the onshore US copper stockpiles are a counter weight to the US/China Rare Earth friction. Ie Tariff will come on, stock will draw from LME, Copper will "scarcity price" and if your not there as we like the say "shut the gate, the horse has bolted".

Copper – I feel some of the frustration in the way its traded this week in conversations. Came in Monday with a full head of steam, stock draws have persisted and miners continue to struggle with weather anomalies. I also feel very very strongly that the GLEN with Koreas Eximbank (cash for conc) has utterly overlooked/mispriced by the market. When an official of the lending bank calls it’s a “ “preemptive move” from an “economic-security” perspective, you kinds gotta stop for a moment and think. – trading desk watching deliveries, tom/next, curve remains backwardated (metal getting re-warranted). Its really about precious taking all the Oxygen and subsequently the ask to me is do we get some pivot from the Gold move into Copper. Starting point is Gold had so much focus on the 200day. Remember it got real ugly when it broke down through it. I also saw a survey saying “16% of managers say Gold undervalued, the most “bullish” reading since March 2023”….I don’t necessarily think you see a scaled up pivot, I more about risk allocaton to the space. My thinking has more recently been the below on Gold, and Copper has to compete for the upside. Equally the moves on Canadian Tariffs could breed some caution (I think this is apples and oranges and would disregard). I like Copper, you can pair it with Ali.

Gold – the obvious big one was the 200day at $4500, the action was fast with the Wednesday China night session move, postionally a top5 of the last 3years. My take has been your adding as we go up. The $4k trade was a 4/10, then as the 100day come out it likely moved toward 6/10 and now the 200day

takes you >8/10. Its all about the belly v the wings. To many if you can get a regime change (debasement etc) and specs back in, then the 20% you collect form $4500 to $5k is the trade you lean into. Sure it can chop before it restarts the move again, however its hard to see 20% in Oil, Copper, Steel, Ali in the short term. ...I did notice a peer picked up coverage of EGO.US yday at buy (c.20% upside). Still a name discussed a few times on the desk yesterday - the move has lagged for example AEM.US last 5days (i picked that names as its the highest multiple peer and shold really lag on a commodity move like this), given the catalyst heavy nature its easy to see why eyes hold here on EGO with a site trip in Sept. I would say take a look at the register on BBG, some fairly impressive adds - as for catalysts taking a very quick pass you have 5 boxes to tick into year end that all have considerable delta to share price to me: Power connection established (Late Aug/Sept), Skouries first concentrate (Q3), Mcilvenna Bay commercial prodn (Q3), Skouries commerical prodn (Q4), Mcilvenna bay resource upgrade, Olympias ongoing stability and expansion ramp..... Its unusual to be so fully loaded in such…