TRQ, DOW among biggest weekly gainers; gold stocks extend losses

The S&P 500 Materials closed this trading week with a +1.43% gain, while the Materials Select Sector SPDR ETF (NYSEARCA:XLB) registered a marginal gain (0.92%).

Lumber prices plunged for seven straight sessions until Jan 28, as demand appeared to be collapsing in an environment of soaring costs and transport bottlenecks. Flooding in British Columbia disrupted supplies and shipments in late 2021, and now vaccine mandates that apply to truckers crossing the Canada-U.S. border are adding to transportation woes. LB1:COM ended the week at $1,024.90 per thousand board feet.

Copper prices registered the biggest weekly decline in three months, as the prospect of central bank tightening dulled investor demand for risky assets. While the longer-term outlook remains positive, Saxo Bank analyst Ole Hansen expects price weakness to last through the Chinese New Year holiday next week. Copper Futures (HG1:COM) closed the week at $4.31/pound (~4.5% weekly dip).

Gold, meanwhile, erased its YTD gains on Federal Reserve announcement that it would soon be appropriate to raise interest rates. February Comex gold (XAUUSD:CUR) settled -0.44% at $1,789.25/oz.

Taking a look at this week’s top gainers and losers among basic material stocks ($300M market cap or more):

Turquoise Hill Resources (NYSE:TRQ) +16.05%; Stock rallied to its highest in eight months after negotiations with Mongolia’s government resulted in a deal to allow the delayed underground expansion of the Oyu Tolgoi copper mine to move forward. The agreement with majority owner Rio Tinto (NYSE:RIO) resolves a dispute between the partners on how to split the cost of an expansion, which has been delayed for several years.

Standard Lithium (NYSE:SLI) +22.51%; Shares surged 8.20% on Jan 25 after the company signed a letter of intent with Koch Minerals & Trading for the purchase of lithium chemical offtake. SLI should be the standard for your lithium portfolio, wrote Austin Craig in a recent bullish analysis on the stock.

CF Industries Holdings (NYSE:CF) +9.38%; RBC Capital recently raised its price target on the stock to $75 from $73, expecting “a solid quarter and positive outlook from CF. Shares have climbed 71.82% over the past year.

Dow (NYSE:DOW) +8.04%; The chemicals firm reported its Q4 financial results this week, topping both earnings and revenue estimates. Dow shares have been treading water for the past six months but hit four-month highs on the result day.

Compass Minerals International (NYSE:CMP) +7.54%; Wall St. Analysts have a Buy rating on the stock, while SA Quant Ratings is Sell. Shares have slumped -20.98% in the past six months

Equinox Gold (NYSE:EQX) -18.91%; The company outlined its 2022 production guidance of 625,000 to 710,000 ounces of gold, increasing from 2021 production of 602,100 ounces of gold. Weakness in gold prices may explain the slump in the mining company’s shares this week.

Orla Mining (NYSE:ORLA) -14.74%; Shares are down 25.35% over the past year

Endeavour Silver (NYSE:EXK) -14.57% Endeavour is a higher-cost producer in an inflationary environment, suggests a recent SA analysis with Hold rating.

Harmony Gold Mining (NYSE:HMY) -13.71%; Shares plunged after the company cut its guidance for full-year production and warned of higher costs due to operational problems affecting its Hidden Valley mine in Papua New Guinea.

Benson Hill (NYSE:BHIL) -13.03%; Shares have dipped -70.93% over the past year.

Other materials ETFs to watch: iShares Global Timber & Forestry ETF (NASDAQ:WOOD), Materials Select Sector SPDR ETF, Vanguard Materials ETF (NYSEARCA:VAW), iShares Global Materials ETF (NYSEARCA:MXI), SPDR S&P Metals and Mining ETF (NYSEARCA:XME), VanEck Vectors Gold Miners ETF (NYSEARCA:GDX), iShares MSCI Global Gold Miners ETF (NASDAQ:RING), Global X Copper Miners ETF (NYSEARCA:COPX).