Why the Lake Resources (ASX:LKE) share price surged 10% on Tuesday

Here’s what might have driven the Lake Resources share price higher today.

| More on:
a happy investor with wide mouth expression grasps a computer screen that shows a rising line charting the upward trend of a share price

Image source: Getty Images

The Lake Resources N.L. (ASX: LKE) share price took off today despite silence from the company.

As of Tuesday’s close, the Lake Resources share price is 97.5 cents, 10.17% higher than it was at the end of Monday’s session.

However, it wasn’t alone in its gains. As The Motley Fool Australia reported earlier today, many ASX lithium shares surged higher on Tuesday.

ASX lithium giant, Plibara Minerals Ltd (ASX: PLS) saw its share price gain 8.1% over the course of Tuesday. Meanwhile, that of AVZ Minerals Ltd (ASX: AVZ) and Liontown Resources Limited (ASX: LTR) shot up 10.9% and 5.5% respectively.

Let’s take a look at what might have boosted the lithium exploration company’s stock higher.

What may have driven the Lake Resources share price today?

The Lake Resources share price might have caught a wave born of soaring lithium prices on Tuesday.

S&P Global reported that domestic Chinese lithium carbonate and hydroxide prices hit another record high last week amid “nervous energy” in the market. A source told the publication that buyers were trying to get their hands on lithium before prices soared again.

Such anticipation of another lithium run might be evidenced by the Global X Lithium & Battery Tech ETF‘s (NYSEARCA: LIT) recent movements. The exchange-traded fund (EFT) surged to a new record high last night.

Additionally, the Australian Government released its Long-Term Emissions Reduction Plan today. It’s expected to see Australia reach net zero emissions by 2050.

It has a heavy focus on an existing strategy: The Technology Investment Roadmap. The roadmap’s first low emissions technology statement prioritises 5 technologies, one of which is energy storage.

A media release from Prime Minster Scott Morrison and Minister for Industry, Energy, and Emissions Reduction Angus Taylor stated that the government’s existing $20 billion investment in low emissions technology should unlock at least $80 billion of private and public investment.

The news may have bolstered excitement over ASX lithium shares, as it might be assumed, a technology-focused strategy could call for a lot of battery minerals.

Should you invest $1,000 in Lake Resources right now?

Before you consider Lake Resources, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Lake Resources wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Materials Shares