Mining stocks are on the climb today after last week’s surprise jump in gold and silver prices. Indeed, companies like Endeavour Silver (NYSE:EXK) and Harmony Gold (NYSE:GATO) are each up more than 3.5% today.
What’s up with mining stocks lately?
Well, as gold and silver prices rise to multi-year highs, mining stocks have rightfully come along for the ride.
Gold prices are at record highs. The precious metal is currently at $2,431 per ounce, its highest level ever, after climbing almost 4% over the past five trading sessions. This has contributed to the metal’s 17.5% year-to-date (YTD) gains.
Not alone, silver prices are currently trending around $32 an ounce, its highest level in more than a decade. Silver prices are on track to close in the green as well, up an astonishing 3.57% today, up 13.11% over the past five trading sessions, and 35% YTD.
For metals, in particular, this is remarkably quick growth, likely the result of changing monetary policy expectations.
Indeed, gold and silver prices tend to move inversely with interest rates. Expectations of rate cuts have been mostly strong this year. While there was some debate over whether rates will fall this year, the April inflation report reinforced confidence in the easing lending rates. This is likely what’s pushing metal prices — and mining stocks — up lately.
Why Are Mining Stocks Up Today?
Mining stocks have closely tracked metals this year, and that’s a good thing. Indeed, Endeavour Silver is up a staggering 109.95% this year, while Harmony Gold is in the green by 66%. Hecla Mining Company (NYSE:HL), which is up about 2.5% today, has enjoyed gains of 33% since the start of the year.
All in all, it’s been a good year to invest in mining companies. If metals continue to grow at a pace this year, it may become even better. However, this will largely depend on whether the central bank goes forward with its projected rate cuts.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
