First Gold, Then…

All eyes are on gold’s record-breaking run.

The gold bull is in full swing this month as the yellow metal extends to new highs… again. Gold has been on an absolute tear since breaking out above $2,500 for the first time ever back in September, jumping almost double-digits on its run above $2,700.

I’ve recently discussed how the financial media was largely ignoring gold’s impressive rally to new highs. But that’s starting to change…

In fact, the gold rally is making the leap from the financial section to the front page. ABC News even ran a quick gold explainer late last week as futures topped $2,700 for the first time, listing election uncertainties and conflicts in the Middle East as key drivers of the rally.

I think it’s safe to say enthusiasm is building around these precious metals for the first time since gold extended beyond $2,000 at the start of the second quarter. Now, we’re beginning to see follow-through into silver and the mining stocks. Almost everything in the precious metals space is enjoying its day in the sun.

Longer-term, gold has a bright future. But it’s due for a break soon, whether that means a pullback or some sideways consolidation. The cat’s out of the bag! Everyone and their third cousin is now hip to gold’s explosive potential.

Thankfully, gold isn’t the only game in town. In fact, we’re seeing some other key breakouts taking shape across the metals space.

Tracking the Other Metals Boom

Back in the early spring, we touched on some of the metals other than gold that were starting to break out.

Dr. Copper was printing new all-time highs. It felt like the commodity bull run was ready to explode, dragging stocks higher with it.

At the time, copper was successfully holding its $5 breakout and industry pure plays were exhibiting impressive momentum. Southern Copper Corp. (SCCO) was tagging new highs to begin the second quarter and had already racked up year-to-date gains of 25%.

But those dreams of a bigger breakout were short-lived. Copper failed to hold above its 2021-2022 highs and quickly lost that magical $5 level. Instead of consolidating its multi-week rally, everything began to fall apart. It was a rough summer to be a copper bull. By mid-August, the metal had coughed up all of its earlier gains, dropping more than 20% from its peak

Sellers dashed the excitement and copper’s rally as quickly as it started.

But that was four months ago…

Fast forward to today, and Copper is working on repairing the damage from its “false start” breakout:

Copper bottomed out in August and has since clawed its way back from the dead. Yes, it still has work to do. And we’ve had to deal with some choppier action lately due to the will-they-or-won’t-they stimulus plans out of China that have rattled the markets.

But copper futures could find its legs again on a breakout above $4.75, which would probably set up another $5 test. Plus, industry bellwether Southern Copper Corp. (SCCO) continues to look constructive at these levels.

Metals Mania Goes Nuclear

Copper isn’t the only industrial metal stretching its legs these days. Uranium plays have also snapped back to life.

Uranium has been an extremely volatile sector in 2024. Like copper, uranium was threatening to break out back in the second quarter before suddenly reversing into the summer months.

But it’s back in business as the nuclear story continues to evolve. The Global X Uranium ETF (URA) has now surged 45% off its September lows to post fresh 10-year highs:

Up until very recently, the headlines regarding tech’s surging energy demand were primarily juicing utility stocks such as Constellation Energy (CEG) that provide the supply.

I get it! CEG is mooning like an alt-coin. But thanks to some help from Google and Amazon (both are investing heavily in nuclear to help power surging data center energy demands) we’re seeing uranium names take the baton and run.

Cameco Corp. (CCJ), the top holding in URA, is up more than 60% since Aug. 5 and has just posted new all-time highs. Plus, it’s outperforming the broader market. NexGen Energy (NXE), another major URA holding, is challenging its record high set in May of this year – a high set two months after gold broke out and two weeks before copper futures hit five bucks.

Of course, we can’t leave out Denison Mines (DNN) when discussing uranium. Founded by legendary mining engineer Stephen Boleslav Roman in the early ‘70s, DNN is still going strong, up 63% since early September.

Lighting the Fuse on Lithium

Speaking of energy-related metals, we also have Lithium…

The Global X Lithium ETF (LIT) ripped higher along with the rest of the China trade last month. In fact, LIT finished September with the largest 1-week rate-of-change since April 2020. We consider this a bullish momentum thrust, or an initiation thrust, as this type of price action often kicks off a bigger uptrend. (LIT rallied roughly 310% from the spring of 2020 to the fall of 2021.)

The gold bull run will likely spill into lithium mining stocks, but these beat down market laggards still need to prove themselves to willing buyers. We’re measuring new highs for lithium names in weeks and months, not years.

Top lithium miners Albermarle Corp. (ALB) and Sociedad Quimica y Minera de Chile (SQM) fell roughly 70% from their 2022 peaks as both printed multi-year lows earlier this summer. Buyers will require more constructive stats. But remember, by the time everyone is talking about lithium, these miners will be ripping like Constellation Energy.

Gold’s decade-long bear market scared virtually everyone out of the metals trades. In 2024, they’re beginning to find their way back.

This is only the beginning. As performance improves, investors will have to work to gain exposure to these emerging market themes. That’s when the real gains begin to stack up.