Earlier this year, this thread opined that risk reward probably would favour Gold over lithium stocks, and I wasn't wrong.
YTD, this is how they have performed
GOLD
Gold +13.33%
XGD +6.45%
Lithium
PLS -3.80%
MIN +0.29%
LTR -32.12%
LTM -23.14%
IGO -21.44%
CXO -42.0%
I suggested that the tables have been turned - that Gold was coming out of winter hibernation and Lithium was going into one (winter hibernation).
It took Gold stocks almost a year to get out of it, and lithium stocks would have to endure a similar period or likely longer. The reason for that is that lithium being beholden to EV would be susceptible to a recession while Gold benefits from it.
And while the market narrative holds out for a soft landing, we can only deduce that the market is in denial that a recession can be avoided in the very short term but not likely with a timeframe of a year from now. Lithium stocks would run out of time to recover before the onset of the coming recession/stagflation.
So believe what you want but I reckon lithium stocks won't recover and will likely have to endure a more painful bear market ahead.
If my thesis is correct, exiting the lithium space to enter Gold (physical/digital/ETF) would avert a protracted lithium winter to embrace a golden summer (punt intended).
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