Gold corrects after hitting $5,635/oz alongside wider metals spectrum as Kevin Warsh takes poll-position for Fed chair
MiFID II exempt information – see disclaimer below
Aura Energy* (AURA LN) – Trading Halt on ASX
Ioneer (INR AU) – US$50m equity raise
New Frontier Minerals* (NFM LN) – Quarterly highlights drilling at Harts Range rare earth prospect alongside concentrate upgrade potential
PLS Group (PLS AU) – Cash rises alongside spodumene prices
SSR Mining (SSRM US) – Hod Maden feasibility study outlines 189kozpa AuEq project
Yellow Cake (YCA LN) – NAV rises on increasing spot prices as long term contracts edge higher
The metals party is not over
- We see today’s price correction as a technical adjustment following Fed action to maintain rates
- Trump’s push for a weaker US dollar, inflation, geopolitics and a move into hard assets as supporting prices after the correction
- Gold falls 7%, Silver down 15%, Copper down 4%
Gold ($5,101/oz) corrects after hitting $5,635/oz alongside wider metals spectrum as Kevin Warsh takes poll-position for Fed chair
- Gold prices slumped 6% overnight, whilst silver prices fell over 15% to $95/oz, before rising slightly.
- The dollar index bounced 50bp to 96.6, having touched 2022 lows.
- The market seems to be looking towards a dollar reversal, driven by increased odds of Kevin Warsh taking the Fed Chair role.
- Polymarket odds suggest Kevin Warsh now has a 94% chance of securing the nomination, up from 30% earlier this week.
- There had been concerns that the previous front-runner, Rick Rieder, would take a more dovish stance to Fed policy.
- However, Warsh is considered a more hawkish pick, having previously emphasised tighter monetary policy, focus on inflation control and reducing Fed balance sheet expansion.
- Warsh’s move into front-runner has caused traders to reduce exposure to metals, likely triggering the sharp sell-off overnight.
- Miners sold off aggressively, with the Van Eck gold miners’ ETF down 3.7% yesterday and 9% in pre-market trading.
- Other key themes remain intact for gold, with a more aggressive US administration driving BRIC countries to further diversify their foreign reserves away from US dollar assets into gold.
- China-US geopolitical tensions are likely to persist, whilst ever widening G7 fiscal deficits raise additional safe haven demand, benefiting gold.
Unprecedented and extreme volatility will leave casualties in a market that normally sees $100/oz as a big move.
- Gold is now settling with as the Fed stabilised interest rates at the current 3.5-3.75% with Jerome Powell referring to a clear improvement in the US economic outlook
- Gold started the year at $4,321/oz rising $1,314 to its peak on late Wednesday evening
- Prices appear to have been driven higher by a general move into hard assets:
- Debasement trade – switching US Treasuries and dollars into gold
- Bitcoin and crypto switching into Gold via Tether
- Substantial Chinese inflows into physical gold and gold ETFs
- Some weakening of the US dollar
- Iran – potential for war
- Cuba – potential regime collapse as US cuts off oil trade
- Russia – potential crisis as US impounds oil tankers in shadow fleet
- China – property collapse averted for now but Chinese cities and regions are carrying substantial debt
- Hedging:
- we believe there is a wall of ‘forward’ gold sales from miners eager to hedge as much metal as they dare to sell forward.
- Many urgent meetings at gold miners will have resulted in decisions to sell every last ounce of spare gold production
- Even gold miners with sworn policies not to hedge production will have been looking at how to lock into the current price
- For a miner with a cost of $1,500/oz it might be possible to lock in a $3,500/oz margin.
- But at the end of the day, someone will have to pay that margin which could prompt further issues in the financial system
- Streaming companies which will have locked in gold production at lower levels will look particularly clever.
- Inflation:
- Gold is the classic safe-haven inflation hedge.
- China has been checking environmental, safety and permit issues at some mines.
- This appears to be part of a deliberate policy to restrict production and enable feedstock prices to rise.
- The action has caused lithium prices to treble, albeit off an unsustainably low base.
- Iran:
- Trump has assembled a huge force to threaten Iran and is keen to show that he means business
- The potential for a strike on Iran seems relatively high raising geopolitical risk
- ETFs:
- Gold ETFs fell back to 100.5moz today from 100.6moz yesterday
IG TV – Commodity Markets Weekly: https://youtu.be/-YKK0NzMLZ0?si=i-83_jtBI8u5bM86
We are now in a new commodities cycle: on VOX: https://www.voxmarkets.com/articles/we-are-now-in-a-new-commodities-cycle-says-sp-angel-s-john-meyer-277006a
Worth reading – Mineral War: China’s Quest for Weapons of Mineral Destruction by Tomasz Nadrowski
| Dow Jones Industrials | +0.11% | at | 49,072 | |
| Nikkei 225 | -0.10% | at | 53,323 | |
| HK Hang Seng | -2.08% | at | 27,387 | |
| Shanghai Composite | -0.96% | at | 4,118 | |
| US 10 Year Yield (bp change) | +3.8 | at | 4.27 |
Currencies
US$1.1934/eur vs 1.1968/eur previous. Yen 153.86/$ vs 153.34/$. SAr 15.924/$ vs 15.749/$. $1.377/gbp vs $1.382/gbp. 0.700/aud vs 0.706/aud. CNY 6.949/$ vs 6.946/$.
Dollar Index 96.45 vs 96.24 previous.
Economics
US – President Trump to announce the next head of the Fed to replace Jerome Powell later today.
- Kevin Warsh is believed to be supported by Trump.
- Warsh, a former Fed governor, was considered for the role in 2017 that ultimately went to Powell.
- Some considered his hawkish views during his time at the Fed as a big obstacle to winning it this time.
- Warsh advocated for “regime change” at the central bank and said that the Fed should reduce the size of its vast balance sheet, FT writes.
- Odds on Polymarket, a gambling platform, that Warsh would head the Fed climbed to 95% on Thursday.
- A more orthodox candidate potentially succeeding in the race for the role saw gold/silver prices pull back and the US$ climbing.
Iran – Brent is on course to hit $70/bbl as the US is ramps up military presence in the Middle East ahead of a potential military strike on Iran.
- “We have a lot of very big, very powerful ships sailing to Iran right now, and it would be great if we didn’t have to use them,” Trump said.
- “Hopefully Iran will quickly ‘Come to the Table’ and negotiate a fair and equitable deal – NO NUCLEAR WEAPONS.”
Precious metals:
Gold US$5,136/oz vs US$5,509/oz previous
Gold ETFs 100.5moz vs 100.6moz previous
Platinum US$2,411/oz vs US$2,721/oz previous
Palladium US$1,843/oz vs US$2,057/oz previous
Silver US$105.5/oz vs US$116.3/oz previous
Silver ETFs 827.3moz vs 834.7moz previous
Rhodium US$11,300/oz vs US$10,850/oz previous
Base metals:
Copper US$13,356/t vs US$13,981/t previous
Aluminium US$3,163/t vs US$3,309/t previous
Nickel US$17,890/t vs US$18,915/t previous
Zinc US$3,381/t vs US$3,475/t previous
Lead US$2,008/t vs US$2,048/t previous
Tin US$52,500/t vs US$56,000/t previous
Energy:
Oil US$69.7/bbl vs US$69.6/bbl previous
- Brent crude oil prices briefly rose above $70/bbl yesterday after US President Trump repeated warnings to Iran to agree to a nuclear deal or face the consequences, which comes ahead of this weekend’s OPEC+ meeting that is expected to make no change to quotas.
- US Henry Hub prices edged higher after the EIA reported a huge 282bcf w/w storage draw to 2,823bcf, with inventories now 4.8% above last year’s level and 6.1% above the five-year average as net LNG exports fell 33bcf w/w to 107bcf (including 11bcf of imports).
Natural Gas €40.8/MWh vs €39.9/MWh previous
Uranium Futures $101.5/lb vs $98.3/lb previous
Bulk:
Iron Ore 62% Fe Spot (Singapore) US$103.8/t vs US$105.3/t
Chinese steel rebar 25mm US$466.0/t vs US$466.3/t
HCC FOB Australia US$233.0/t vs US$233.5/t
Thermal coal swap Australia FOB US$108.5/t vs US$108.5/t
Other:
Cobalt LME 3m US$56,290/t vs US$56,290/t
NdPr Rare Earth Oxide (China) US$107,072/t vs US$100,272/t
Lithium carbonate 99% (China) US$21,515/t vs US$23,106/t
China Spodumene Li2O 6%min CIF US$2,255/t vs US$2,315/t
Ferro-Manganese European Mn78% min US$1,035/t vs US$1,035/t
China Tungsten APT 88.5% FOB US$1,393/mtu vs US$1,353/mtu
China Tantalum Concentrate 30% CIF US$115/lb vs US$115/mtu
China Graphite Flake -194 FOB US$410/t vs US$410/t
Europe Vanadium Pentoxide 98% US$5.7/lb vs US$5.6/lb
Europe Ferro-Vanadium 80% US$24.5/kg vs US$24.5/kg
China Ilmenite Concentrate TiO2 US$261/t vs US$261/t
US Titanium Dioxide TiO2 >98% US$2,908/t vs US$2,908/t
China Rutile Concentrate 95% TiO2 US$1,130/t vs US$1,130/t
Spot CO2 Emissions EUA Price US$65.1/t vs US$65.1/t
Brazil Potash CFR Granular Spot US$367.5/t vs US$367.5/t
Germanium China 99.99% US$3,025.0/kg vs US$3,025.0/kg
China Gallium 99.99% US$395.0/kg vs US$390.0/kg
EV & battery news
Reports that CATL sodium batteries have been installed in passenger vehicles ready for testing
- CATL’s Naxtra brand sodium-ion batteries have been installed into a passenger vehicle model from Changan Oshan and are set to undergo winter testing.
- The battery maker unveiled its first-generation sodium-ion battery in July 2021 amid surging lithium carbonate prices.
- The Naxtra sodium battery has an energy density of up to 175Wh/kg which is comparable to LFP.
| Overnight Change | Weekly Change | Overnight Change | Weekly Change | ||
| BHP | -1.8% | 5.2% | Freeport-McMoRan | 2.4% | 10.7% |
| Rio Tinto | -3.5% | 0.4% | Vale | 1.1% | 7.6% |
| Glencore | -2.9% | -1.6% | Newmont Mining | -3.8% | 4.3% |
| Anglo American | -2.9% | 0.7% | Fortescue | -2.7% | -2.2% |
| Antofagasta | -4.6% | 0.7% | Teck Resources | 2.0% | 11.3% |
Company News:
Aura Energy* (AURA LN) 10.7p, Mkt Cap £116m – Trading Halt on ASX
- Aura Energy reports it has gone into a Trading Halt on the ASX.
- The Trading Halt is in accordance with ASX Listing Rule 17.1, pending the release of a further announcement from the Company regarding a capital raising..
- Uranium Futures prices continue to rise hitting $101.5/lb this morning vs $98.3/lb yesterday
*SP Angel acts as Nomad to Aura Energy
Ioneer (INR AU) A$0.16, Mkt Cap A$428m – US$50m equity raise
- The Company is raising US$50m (~A$72m) at A$0.18 to progress the Rhyolite Ridge Lithium Boron Project, Nevada.
- The issue price represents a ~14% discount to the last close.
- Proceeds to be used for:
- Strategic partnering process
- FID
- Long lead items and early construction works
New Frontier Minerals* (NFM LN) 0.93p, Mkt Cap £16m – Quarterly highlights drilling at Harts Range rare earth prospect alongside concentrate upgrade potential
- RC drilling at the Harts Range prospect has now been completed
- Management report “the geology team were pleased with the campaign, having drill-tested all high-priority targets, to provide insight into the geology and extent of the heavy rare earth mineralisation”
- Samples are at ALS before Christmas with results due shortly.
- A binding commercial framework with Metallium Ltd for the creation of a novel processing pathway for the Harts Range rare earths is designed to create a feedstock suitable for US magnet and defence customers.
- Beneficiation of raw ore from a 25kg bulk sample using Metallium’s Flash Joule Heating technology showed positive results.
- The sample showed a ~20x upgrade in TREO ‘Total rare-earth oxide’ content increase to ~35% from ~1.7 % in a single FJH reaction step.
- Key heavy REEs Dy and Tb, and magnet REE Nd concentrations increased significantly
- Dy₂O₃ upgraded 53× (0.19% → 10.03%) / 11% → 29% of the REO basket (+160%)
- Tb₄O₇ upgraded 21× (0.03% → 0.64%) / 1.7% → 1.8% of the REO basket (+5%)
- Nd₂O₃ upgraded 114× (0.05% → 5.69%) / 2.9% → 16.3% of the REO basket (+460%)
- Complete removal of detectable Fe₂O₃, SiO₂ and Th
- Partial yttrium rejection, reducing Y₂O₃ from 61% to 35% of the REO basket
Conclusion: We await results from the drilling campaign for some indication of the scale and grade of a potential future resource at Harts Range.
*SP Angel acts as broker to New Frontier Minerals
PLS Group (PLS AU) A$4.3, Mkt Cap A$13.8bn – Cash rises alongside spodumene prices
- Major Australian spodumene producer reports December quarterly results.
- Company produced 208kt of spodumene concentrate, down 7%qoq.
- Sales rose 8%qoq to 232kt, realising an average price of $1,161/t, up 57%qoq.
- Revenue generated of A$373m, up 49%qoq.
- CIF OPEX reported at $470/t, up 11%qoq on lower production volumes and inventory drawdown.
- Cash margin from operations at A$166m, from $8m prior quarter, driven by higher pricing and ‘ongoing cost optimisation.’
- Cash rose 12%qoq to A$954m.
- PLS is currently assessing the restart of the Ngungaju plant, expected to be in a position for a potential restart within four months. FID due March Quarter.
- Management is progressing studies on both P2000 and the Colina Project in Brazil.
SSR Mining (SSRM US) $27, Mkt Cap $5.44bn – Hod Maden feasibility study outlines 189kozpa AuEq project
- SSR has completed a technical report on the Hod Maden project in Turkey.
- The undeveloped copper-gold project holds reserves of:
- 7.7mt at 7.6g/t Au and 1.3% Cu for 1.9moz Au and 101kt Cu.
- The study envisages an underground mining operation using long-hole stoping mining 800ktpa.
- Process plant will utilise a mill-float-regrind-cleaner float flowsheet for a 22% Cu and 113g/t Au concentrate.
- Development CAPEX of $910m and sustaining CAPEX of $75m.
- Post-tax NPV5 of $1,7bn and IRR of 39% at $3,167/oz.
- AISC guided at $590/oz Au on a by-product basis.
- Company expects to take a construction decision in 2026, following approvals of local JV partner.
Yellow Cake (YCA LN) 689p, Mkt Cap £1.65bn – NAV rises on increasing spot prices as long term contracts edge higher
- Uranium investment vehicle Yellowcake reports December quarter results.
- The Company completed a £140m placing to exercise its option to purchase 1.33mlb U3O8 at a price of US$75.08 from Kazatomprom, with delivery due 1H26.
- Completion of the purchase is expected to boost Yellow Cake’s total holdings to 23mlb U3O8.
- As of yesterday, Company reports a NAV of £7.27/share at spot prices of $101/lb.
Uranium Market Outlook
- Management reports a reversal of the multi-year trend of declining spot market volumes, with 55.3lb traded in 2025, down from 102mlb in 2021.
- Company notes increased volatility in longer-term contracts.
- Long-term pricing strengthened over the quarter, rising from $79/lb to $86/lb during the quarter.
- Company highlights the Westinghouse deal between Cameco ad Brookfield, which is set to see $80bn of investment in the US nuclear power industrial base.
- South Africa is aiming to bring on 5.2GW of new nuclear capacity by 2039 to offset declining coal generation.
- India is targeting 100GW of nuclear capacity by 2046, alongside Japan who are acceleratingnuclear restarts.
- Company notes increased data centre demand boosting power purchase agreements between tech companies and nuclear utilities.
LSE Group Starmine awards for 2025 / 2024 commodity forecasting:
No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Precious Metals forecasting in LSEG Annual Starmine Award for Reuters Polls for Q1 2025
No.1 in Precious Metals: SP Angel mining team awarded No 1. ranking for Precious Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024
No.2 in Base Metals: SP Angel mining team awarded No 2. ranking for Base Metals forecasting in LSEG Annual Starmine Award for Reuters Polls 2024
Analysts
John Meyer –John.Meyer@spangel.co.uk – 0203 470 0490
Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484
Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474
Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476
Sales
Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472
Abigail Wayne –Abigail.Wayne@spangel.co.uk – 0203 470 0534
Rob Rees –Rob.Rees@spangel.co.uk – 0203 470 0535
Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471
George Krokos – george.krokos@spangel.co.uk – 0203 470 0486
Prince Frederick House
35-39 Maddox Street
London, W1S 2PP
*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)
+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
| Sources of commodity prices | |
| Gold, Platinum, Palladium, Silver | BGNL (Bloomberg Generic Composite rate, London) |
| Gold ETFs, Steel | Bloomberg |
| Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt | LME |
| Oil Brent | ICE |
| Natural Gas, Uranium, Iron Ore | NYMEX |
| Thermal Coal | Bloomberg OTC Composite |
| Coking Coal | SSY |
| RRE | Steelhome |
| Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite, Rutile | Asian Metal |
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