Olive Resource Capital Stands Firm on Commodity Thesis Amid Near-Term Noise

Olive Resource Capital's executives Derek Macpherson and Samuel Pelaez expect near-term noise from the Federal Reserve decision and US midterm elections to mask their long-term commodities thesis. They see a rate hike as likely but insufficient to address current inflation, driven by supply disruptions in diesel prices.

The pair views the US Dollar Index (USD) as their key indicator for commodity prices. Currently sitting at a significant support level, they anticipate two possible paths: either a short-term rebound coinciding with a potential rate hike or a break below that level, which would signal a more substantial move lower for the dollar and upward pressure on commodities.

Olive's investment process involves taking small initial positions in high-conviction names, scaling up through open market purchases and financings as the thesis plays out. Recent exits have freed capital for new positions, with Omai Gold Mines now the firm's largest holding.