What you need to know: • The precious metals markets were down slightly in the month of June, however, we view this as a healthy consolidation period following significant price increases since November 2022. • M&A slowed in June primarily due to the new uncertainty regarding interest rates following strong economic data and the BoC raising 25bps. • Safe-haven assets like gold and silver continue to look highly attractive with inflation remaining sticky and rates likely to decline by 2024. Sentiment Update June was similar to May for the gold price, posting a modest 2.2% decline to $1,919.1/oz, while silver fell 3.1% to $22.8/oz, and copper increased 2.8% to $3.7/lb. Mining equities also fell modestly with the GDX down 2.9%, underperforming broader markets like the S&P 500 which was up 6.3% and the TSX which was up 3.0%. The battery metals space remained mainly flat through the month and lithium held onto its large gains made last month (up 68% in May), being up ~3% during June. We believe the last two months of consolidation for precious metals and other commodities is healthy considering the significant increase in prices since November 2022. We look forward to the metals regaining their upward momentum over the next few months, after years of under-investment in the sector. M&A slowed during June which we believe was due to the lack of clarity on the direction of interest rates. As described in our April and May Mining Monthly notes, there was a sizeable spike in M&A transactions due to the potential of peaking of interest rates, however, new data suggests that both the U.S. and Canada may continue to tighten (as exemplified by the June 7th hike from the BoC). We believe this lack of clarity may further slow transactions until a more lasting pivot is guided from both the Fed and BoC, where we expect M&A to pick-up again. On June 7th, the Bank of Canada increased rates by 25 bps to 4.75%, breaking a conditional pause put in place after the last hike in January. On the other hand, on June 13th, the Fed decided not to raise rates and maintained its target rate at 5.00% to 5.25%. This June pause marks the first policy meeting at which the FOMC has not raised interest rates since it began tightening in March 2022. However, the pause is likely only temporary as the market anticipates additional rate hikes coming. On June 13th, U.S. inflation came in at 4.0% YoY and 0.1% MoM, compared to consensus of 4.1% YoY and 0.2% MoM. This compares to U.S. Core inflation data which came in as 5.3% YoY and 0.4% MoM, in line with consensus expectations. Canadian core inflation was lower than expectations, posting 3.7% YoY and 0.4% MoM vs. consensus of 3.9% YoY and 0.5% MoM. Much of this drop is attributable to a large decrease in energy prices which are down 12.4% YoY. On June 29th, the U.S. GDP Growth Rate came in at +2.0% QoQ vs. consensus of +1.4%, highlighting strong growth but a sizeable gap in GDP growth to the inflation rate still remains. Canadian MoM GDP Growth came in at 0.0% vs. 0.2% for consensus and down from the +0.1% last month. Despite the recent inflation numbers being lower than expectations, every inflation metric still remains far above traditional target inflation levels. As a result, the Bank of Canada will likely hike by another 25 basis points in July while leaving the door open to further tightening if the data fails to cooperate over the summer. We believe the stickiness of inflation and continued rate hikes will increasingly push investors to gold as a safe-haven asset in 2023.