What you need to know: • The precious metals markets held flat in August, following the solid performance in July; mining equities fell modestly. • M&A continued to be light in August, we believe this is primarily due to the lack of clarity regarding the direction of interest rates. • Safe-haven assets like gold and silver continue to look highly attractive with mining equities trading close to trough multiples, creating buying opportunities for when investment dollars flow back into the sector. Sentiment Update Commodity prices remained relatively flat through August, following a strong month in July. Mining equities fell along with a down month for broader indices. Gold fell 0.2% to $1940.0/oz and silver was up 0.4% to $24.4/oz. Copper decreased 3.1% to $3.8/lb, following a gain of 5.5% in July. We note that there still remains a strong uptrend in gold, silver, and copper with the three being up 14.4%, 36.9%, and 11.1% YTD, respectively. Mining equities slightly underperformed broader markets with the GDX down 6.8% and COPX down 9.3% compared to the TSX and S&P500 which were down 1.6% and 1.4%, respectively. The battery metals space continues to be mixed with lithium down another 23% in August while cobalt, nickel, and tin were up 7%, 8%, and 10%, respectively. We are remaining patient as mining equities trade at close to trough multiples but we don’t expect this to last with the backdrop of persistent elevated metals prices, a poor supply outlook, and increasing demand across almost all metals. M&A activity was again light in August, similar to June and July, which we believe was due to the lack of clarity on the direction of interest rates. We believe M&A will accelerate once there is a more definitive pivot from both the Fed and BoC. This could also contribute to an increase in investment flows into the mining and metals equities. On August 10th, U.S. inflation came in at 3.2% YoY and 0.2% MoM, compared to consensus of 3.3% YoY and 0.2% MoM. This compares to U.S. Core inflation data which came in as 4.7% YoY and 0.2% MoM, compared to consensus expectations of 4.8% YoY and 0.2% MoM. Canadian core inflation was in line with expectations, posting 3.2% YoY and 0.5% MoM vs. consensus of 3.2% YoY and 0.4% MoM. On August 30th, the U.S. GDP Growth Rate came in at +2.1% QoQ below consensus of +2.4%, with the market beginning to show the effects of the elevated interest rates. Canadian MoM GDP Growth came in at -0.2%, in line with consensus but down from 0.2% last month. The deteriorating economic data leads us to believe that both the Canadian and the U.S. economies are finally starting to show the effects of the interest rate hikes and this could lead to a long-awaited pivot.