The stock markets reacted globally when US inflation data came out hotter than expected. CPI accelerating faster than expected dashed hopes of any rate cut soon. The expected rate cut might not happen before September, was the broader view. And as expected it took its toll on the markets.
As if not enough, the conflict in the middle east ensued. The markets went topsy turvy when Iran launched missiles at Israel. There was a fear of immediate escalation but pressure from U.S. on Israel for a measured response halted it for some time.
Now, coupled with the assertion from Israel of not letting go Iran scot free, US planning to impose sanctions on Iran can affect the markets in coming days.
Although much has been discounted by now, as seen in the price action, tensions in region that is a major producer of world’s crude can lead to a surge in crude oil prices, further pushing the inflation upwards.
Since base metals and energy prices tend to rise at the times of geopolitical tensions and the increasing popularity of gold as a safe haven, these stocks will not be much impacted. Australian market having more share of mining and energy stocks, it is most likely that such headwinds will be offset by nature of our Stock Market Composition.
The best stocks to buy at such times are the stocks whose long term price trend is good.
West African Resources Limited (ASX: WAF)
West African Resources, in 2024, has outlined significant initiatives, particularly at M1S. The primary focus is on advancing exploration activities throughout the calendar year, with the ongoing exploration drive at M1S nearing completion and resource definition drilling slated for the second quarter of 2024. Additionally, development of the M5 South exploration drive is set to commence in the second quarter of 2024, with drilling scheduled to begin in the first quarter of calendar year 2025.
Its recent diamond drilling conducted at the M1 South (M1S) main zone within its Sanbrado Gold Operations had successfully intercepted high-grade mineralization, confirming significant areas of high-grade resource and bolstering confidence in the 10-year operational plan.
Resolute Mining Limited (ASX: RSG)
Resolute Mining Limited is actively advancing both Phase I and Phase II of the planned expansion at Syama simultaneously. Construction for Phase I is scheduled to commence in the first quarter of 2024, with commissioning expected in the first half of 2025. This underscores the potential for significant near-term expansion in the company's business activities and Financial Performance.
Concurrently, efforts are underway to initiate work on Phase II expansion. Furthermore, the company is also committed to extending mining projects at Tabakoroni within Syama. Operational enhancements at the Mako Gold Mine are also anticipated to yield substantially improved grades exceeding 2g/t over the next two years.
It experienced a notable financial resurgence in the initial half of Fiscal Year 2023, evidenced by a substantial profit of $129 million, a stark contrast to the consistent and considerable losses incurred in preceding years.
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