U.S. metals and mining stocks experienced a significant one-day rally in 2024, all thanks to China’s surprising and substantial monetary easing efforts. China’s People’s Bank’s stimulus measures, such as cuts to the reserve requirement ratio and repo rates, played a critical role in driving up global demand for raw materials, leading to a surge in metal prices and mining stocks. This demonstrates the interconnectedness of the global economy and the impact of major economies’ monetary policies on various sectors.
The SPDR S&P Metals & Mining ETF XME achieved a 4.2% surge, marking its most robust one-day performance since November 2023. This surge reflects the heightened optimism in the sector, particularly as China, the world’s largest consumer of raw materials, plays a significant role in driving demand and prices in the metals and mining industry.
Chart: Metals & Mining Stocks Mark Best Day In Almost A Year
Precious, Industrial Metals Shine
Gold prices soared to a fresh record high on Tuesday, reaching $2,638 per ounce, the highest in history. This surge can be attributed to the anticipation of increased liquidity from global central banks, indicating the significance of monetary policy on precious metal prices.
The People’s Bank of China’s 50-basis-point cut to the reserve requirement ratio is anticipated to boost bank lending and provide relief to heavily indebted sectors. Furthermore, the reduction in key interest rates signals potential future monetary easing efforts in the global economy, impacting metal prices positively.
Silver and copper also experienced significant gains, with silver jumping 1.2% and copper surging over 3%. The broad increases in metal prices are driven by the expected rise in Chinese demand, illustrating how economic policies of major players can have profound effects on global commodity markets.
Last week, the Federal Reserve’s decision to slash interest rates by 50 basis points to 4.75%-5% further contributed to the supportive environment for metal commodities, showcasing the interconnected nature of global economic policies on the metals industry.
Mining Stocks, ETFs Post Gains
Mining-related stocks and ETFs demonstrated strong performance on Tuesday. The Global X Copper Miners ETF COPX surged over 6%, aligning with the sharp increase in copper prices. Additionally, the Global X Silver Miners ETF SIL saw a 2% rise, indicating the overall positive sentiment in the mining sector as a result of China’s monetary actions.
Here are the five strongest performers within the SPDR S&P Metals & Mining ETF stocks on Tuesday
| Company | Price | 1-Day Return |
|---|---|---|
| MP Materials Corp. MP | $15.72 | +10.48% |
| Ramaco Resources, Inc. METC | $11.04 | +8.83% |
| Warrior Met Coal, Inc. HCC | $59.94 | +7.81% |
| Alcoa Corporation AA | $36.78 | +7.45% |
| Cleveland-Cliffs Inc. CLF | $12.74 | +7.36% |
Photo via Shutterstock.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
U.S. metals and mining stocks experienced a significant one-day rally in 2024, all thanks to China’s surprising and substantial monetary easing efforts. China’s People’s Bank’s stimulus measures, such as cuts to the reserve requirement ratio and repo rates, played a critical role in driving up global demand for raw materials, leading to a surge in metal prices and mining stocks. This demonstrates the interconnectedness of the global economy and the impact of major economies’ monetary policies on various sectors.
The SPDR S&P Metals & Mining ETF XME achieved a 4.2% surge, marking its most robust one-day performance since November 2023. This surge reflects the heightened optimism in the sector, particularly as China, the world’s largest consumer of raw materials, plays a significant role in driving demand and prices in the metals and mining industry.
Chart: Metals & Mining Stocks Mark Best Day In Almost A Year
Precious, Industrial Metals Shine
Gold prices soared to a fresh record high on Tuesday, reaching $2,638 per ounce, the highest in history. This surge can be attributed to the anticipation of increased liquidity from global central banks, indicating the significance of monetary policy on precious metal prices.
The People’s Bank of China’s 50-basis-point cut to the reserve requirement ratio is anticipated to boost bank lending and provide relief to heavily indebted sectors. Furthermore, the reduction in key interest rates signals potential future monetary easing efforts in the global economy, impacting metal prices positively.
Silver and copper also experienced significant gains, with silver jumping 1.2% and copper surging over 3%. The broad increases in metal prices are driven by the expected rise in Chinese demand, illustrating how economic policies of major players can have profound effects on global commodity markets.
Last week, the Federal Reserve’s decision to slash interest rates by 50 basis points to 4.75%-5% further contributed to the supportive environment for metal commodities, showcasing the interconnected nature of global economic policies on the metals industry.
Mining Stocks, ETFs Post Gains
Mining-related stocks and ETFs demonstrated strong performance on Tuesday. The Global X Copper Miners ETF COPX surged over 6%, aligning with the sharp increase in copper prices. Additionally, the Global X Silver Miners ETF SIL saw a 2% rise, indicating the overall positive sentiment in the mining sector as a result of China’s monetary actions.
Here are the five strongest performers within the SPDR S&P Metals & Mining ETF stocks on Tuesday
| Company | Price | 1-Day Return |
|---|---|---|
| MP Materials Corp. MP | $15.72 | +10.48% |
| Ramaco Resources, Inc. METC | $11.04 | +8.83% |
| Warrior Met Coal, Inc. HCC | $59.94 | +7.81% |
| Alcoa Corporation AA | $36.78 | +7.45% |
| Cleveland-Cliffs Inc. CLF | $12.74 | +7.36% |
Photo via Shutterstock.
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
