Sector Research | Fox-Davies Capital

GOLD PRICE DRIVERS

As observed in 2008/09, and more recently in March this year, all precious metals stocks collapsed with everything else. This is logical, given their current appreciation is highly correlated with the overall market gains.
We remain secular gold bulls, demonstrating that all other currencies are fiat, and all depreciate in time.

GLOBAL VEHICLE SALES PGM DEMAND

Global car sales have been largely saved by domestic demand from within China which was almost on par with the PCP; contrasting with our earlier predictions in April 2020 that global sales would be down 50%; which we revised upwards in August to 24%.

NEW J. HUTTON

In evaluating the investment thesis behind Bitcoin, and the recent belief by its proponents
that it has now reached safe-haven status; we contrast it to gold and conclude that Bitcoin
as an investment is not fit for purpose.

RARE EARTHS

Approximately half of advanced technologies are reliant on REEs in some form or another, from F35 jet fighters, catalytic converters, batteries, fibre optic cable, sensors, actuators to electric motors relying on permanent magnets. The presence (or absence) of light rare-earths (LREEs) is a critical determinant for any investment
decision.

LITHIUM DEMAND & SUPPLY

The future of lithium and its growth is fundamentally tied to the growth of EVs and hybrids which is expected to double over the next decade despite several years of stagnant production.

CRYPTO

CURRENCIES VS GOLD

There is an underlying conviction that cryptocurrency is a genuine asset class and a credible alternative asset to gold, endorsed by corporate sponsorship from the likes of PayPal, MicroStrategy, Blackrock and (formerly) Tesla.

POTASH AND PHOSPHATE

The fertiliser industry for the better part of a decade has been plagued by overcapacity and poor utilisation. Our analysis suggests that fundamentally, both potash and phosphate consumption is approaching production constraints.