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Mining Stocks: Moly Demand is Soaring and the Markets Can't Get Enough
Inside this article:
- Moly demand is climbing and supply can't keep up
- Why the investment world hasn't caught on yet
- The perfect way to play it
Mining Stocks: A sign of things to come
It's always tough to gauge true demand for something. Like the Tickle-Me-Elmos that sell out weeks before Christmas or the much maligned Coke II of the 1980s. Frankly, when gauging potential demand for something new, it's more of a crapshoot than any form of science.
But when you see something sell-out overnight, you know you've got something big. And that's exactly what happened earlier this week.
After I wrote to you last week about molybdenum, the moly supply/demand situation has only gotten worse.
I looked into it a little further and get this: according to the 2006 U.S. Geological Survey, demand for moly in the U.S. increased 25.7%, in the last year alone. However, there was only a 4% increase in production in 2006.
Mining Stocks: We're just getting started
However, the investment community has only started to take note. Earlier this week, Sprott Asset Management finally closed the deal on its newest moly-focused hedge fund. Clearly, Sprott is trying to stay one step ahead of the moly boom by creating a stand-alone hedge fund to capitalize on rising moly prices.
And just to show you how much the financial community is starting to catch on, the launch of the fund was a blow-away success. Sprott was hoping to raise between C$120 million and C$150 million to start the fund, but there was just too much interest. Once everything was said and done, Sprott raised 200 million dollars Canadian in the fund launch.
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And China Molybdenium is attracting a lot of attention for its IPO. According to The Standard, “China Molybdenum closed its offering Wednesday, is also likely to price its IPO at the high end of the price range after it was oversubscribed about 400 times in its retail tranche, market sources said.
Clearly, there is some big interest headed towards the moly. And with leading Canadian financial firms like Sprott helping to draw interest, there is likely plenty more gains to come.
Mining Stocks: Coming soon
So on Friday, I will be returning to Taipan Financial News Market Insights show to reveal what's hot in the moly world, along with a few ideas of how to play it. So stay tuned. As a Fear & Greed reader, I'll ensure you get a chance to watch the video.
As for the markets today, the Dow Jones Industrial average set another new high, lthough you could have passed right over the news. Unlike the months when the index was setting new highs, seemingly every day, there just isn't that robust bullishness sweeping across the markets.
Right now, it's best to stick to commodities where the supply/demand situation is in complete disarray like moly or to stay in beaten down sectors. And right now, no sector is more beaten down than utilities. That's where the smart money is.
Stay tuned to TFN on Friday. The moly rush has only begun, and you still time to get in on it.
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