Far East Capital Newsletter
Helium market is looking tight
5 Jun 2021

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Helium market is looking tight

It was another positive week but on Thursday gold was hit by the thematic that will be reoccurring for the foreseeable future - inflation. The gold price goes up with inflationary expectations but it goes down when interest rates respond to inflation. At least, that is the broad theory, but the markets don’t always hold the line.

Whatever gold is supposed to do, remember that almost all the gold that was ever mined is still available in bank vaults and potentially able to be traded. Speculators need to be aware of this fact when they are trying to pick the future gold price. While mine supply is constrained, supply of gold for trading purposes is not. This is the dominant reality when playing the gold market, more so than inflationary expectations. There is a range of influences on the gold price and what is the most important at any one point needs to constantly reassessed. Right now it is the outlook for interest rates.

We have all heard of helium but how many of us know about the market, the economics and the investment vehicles by which we can participate in the upside that is being predicted? Not many, I’d guess. There are two recognised helium companies listed on the ASX that I am aware of. Both have been listed in the chart comments for some time, waiting for me to find time to do some research; Blue Star Helium (BNL) and Renergen Ltd (RLT). 

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