Monthly commentary - Mackenzie Resource Team

Written by the Mackenzie Resource Team

Global Resource Fund - Portfolio Insights 

• The rally in gold prices persisted in the second quarter, underpinned by heightened geopolitical uncertainty, sustained central bank buying, and an accelerating de-dollarization trend. Several gold-related holdings delivered strong performance, including Lundin Gold (+61%) and Endeavour Mining (+22%).
• Amid heightened uncertainty surrounding the impact of tariffs on the global economy, oil prices were impacted (WTI/Brent -9%), leading to broad-based weakness across the energy sector. Our underweight positions in Chevron (-14%) and ExxonMobil (-9%) contributed positively to relative performance but was partially offset by our overweight position in TotalEnergies (-13%). Despite the sector’s overall decline, Advantage Energy (+9%) outperformed due to robust quarterly results with all-time high production volumes and strong cash flow generation.
• Heidelberg Materials (+27%) was supported by renewed optimism in European infrastructure investment and a favourable price-cost dynamic.
• The Fund’s underweight position in the uranium (Cameco; +71%) and specialty chemicals sectors were the main detractors for the Fund during the quarter. Forest products were weighed down by ongoing weakness in residential construction, negatively impacting Interfor (-16%).

Precious Metals Fund - Portfolio Insights 

• Intermediate gold producer Lundin Gold (+64% during the quarter) raised its dividend twice this year and was immediately rewarded by the market. This illustrates that a solid capital return strategy, in the form of dividends and/or share buybacks can support shareholder returns in the gold industry.
• Chilean gold developer Rio2 Ltd. (+66%), a long-term holding of the Fund, is being recognized as an imminent gold producer with a very large resource base.
• Equinox Gold (-21%) disappointed twice during the quarter, by raising its offer for Calibre Mining, and by downgrading its production outlook. Strengthening of its management team, precipitated by the merger, is needed to turn around its performance.
• Discovery Silver was added to the portfolio after completing its takeover of the Timmins (Ontario) gold mines that were divested by Newmont. This change in ownership and management offers the opportunity to turn around the performance of these mature mines, and to unlock the large resource potential, as confirmed by a site visit by the Portfolio Manager.
• Profits were taken in large cap producers Gold Fields and Kinross.

Macro Views

• Global markets have demonstrated notable resilience, recovering swiftly from the April downturn. This rebound has been supported by fiscal stimulus announcements and a continued decline in inflationary pressures. While the inflationary effects of tariffs appear to have been either absorbed by corporations or deferred, we believe the full impact has not yet materialized. Notably, preemptive inventory accumulation ahead of tariff announcements may be temporarily dampening inflationary outcomes.
• The U.S. economy continues to surpass expectations, maintaining robust momentum despite restrictive monetary conditions. Investment in the manufacturing sector remains solid, bolstered by government incentives aimed at reshoring critical industries. Commodity markets have shown stability during this transitional period, and we anticipate that fiscal support, infrastructure spending, and a potential reacceleration in economic activity will create a constructive environment going forward.
• Economic activity in China remains subdued, with growth primarily driven by export performance. We suspect that current export levels may be temporarily inflated as global buyers front-loaded orders ahead of anticipated tariffs. Domestic consumption and fixed asset investment remain weak, and real GDP growth continues to track near 5%.
• The European Central Bank’s recent rate cuts, combined with easing inflation, signal a cautiously optimistic outlook and may represent the beginning of a more accommodative policy stance.

Oil & Natural Gas

• Oil prices have recovered from recent lows in the $60 range, despite OPEC’s announcement of increased production. Seasonal demand within OPEC countries, which typically peaks during the summer, may be absorbing a portion of the added supply. We maintain a cautious stance on oil producers as additional supply is expected to enter the market in the fall. Furthermore, subdued demand from China and increasing electric vehicle (EV) adoption globally may act as a structural cap on oil prices, even amid broader economic recovery.
• The operational behavior of the oil industry remains disciplined, with U.S. producers continuing to reduce drilling activity. A sustained improvement in prices or a more optimistic market outlook will likely be required to incentivize production increases.
• Natural gas demand remains structurally sound, supported by the commissioning of new liquefied natural gas (LNG) export facilities. Several LNG terminals are scheduled to begin operations in 2025 and 2026, underpinning an expected 5% annual growth rate. While current seasonal demand has been modest, market attention has already shifted toward winter. Inventory levels for 2025 are projected to be strong, and we foresee a temporary pause in momentum over the next quarter.
• We continue to hold an underweight position in oil producers and an overweight position in natural gas producers.

Copper

• Copper prices in the U.S. are now incorporating localized premiums, similar to those observed in aluminum markets. Tariff impacts are likely to be passed through to end-users. Copper remains a foundational element in structural themes such as onshoring and electrification. Policymakers globally are recognizing its strategic importance, with the U.S. classifying it as a critical resource. We expect this recognition to drive further investment in the sector.

Gold & Precious Metals

• We maintain a pronounced overweight allocation to gold in the resource fund, which continues to perform well amid sustained central bank purchases and renewed investor interest from developed markets. These trends are underpinned by persistent geopolitical uncertainty and ongoing global de-dollarization efforts.
• With long-term U.S. bond yields now unanchored, the U.S. dollar under pressure, and historical cross-market correlations breaking down, global investors are scrambling to find lower risk, non-correlated alternative asset classes. Gold is the obvious independent ‘currency’ that is benefiting from these large outflows, together with the Swiss Franc, Bitcoin and real assets. Gold, alongside broader commodities, remains an effective hedge against potential U.S. dollar weakness.
• While gold equities have delivered mixed returns, our positioning has been bolstered by effective security selection. However, we may be approaching a plateau in margin expansion as operational costs begin to rise.
• Silver continues to lag gold in terms of investor appeal, with limited central bank buying and moderate retail interest. That said, silver’s increasing use in renewable energy—particularly solar technology—may shift its role toward that of an industrial metal akin to copper. In the near term, silver and other precious metals may experience a price rally as they attempt to close the performance gap with gold.

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This document may contain forward-looking information which reflect our or third party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and not place undue reliance on forward-looking information. The forward-looking information contained herein is current only as of June 30, 2025. There should be no expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.