The rise of mining stocks in 2020 has been something to watch. Not all mining stocks have skyrocketed in price, but many throughout the year have. Some mining stocks that have gone up in price are related to gold and silver, while others are related to things like platinum group metals and lithium. Now in December there has been debates between analysts as to where the price of precious metals and mining stocks will go next.
Currently there are two major things that are impacting the price of these assets. The first of which is vaccine news, and the second is the current stimulus bill that has been in the works. It is clear for investors of mining stocks that a lot of factors play into what is affecting them at the moment. Usually this type of news is not an occurrence, but 2020 has changed everything in that regard. Let’s dive into reason number one that mining stocks have been moving up and down in the market recently.
How Vaccines Impact Mining Stocks
It is quite obvious actually how vaccine news will impact mining stocks. If you think about it, vaccines being distributed and given out will cause the economy to recover faster. But you must consider that a large amount of damage has been done to the economy, and it can not just recover right when vaccines are given out. 2.9 million vaccine doses have been shipped to the Unites States by Pfizer already. Now Moderna’s vaccine candidate has been approved for use in the United States as well. Many other countries are approving the vaccine and distributing it as well.
Once most people are vaccinated, it is likely that the economy will be in a much different place. We just have to wait and see how many people get vaccinated in 2021, and if the vaccine is truly effective. COVID-19 numbers are rising every day, with the United States passing 300,000 cases in total. Only time will tell the true effect this has on mining stocks and the price of precious metals. If the vaccine is proven not that effective mining stocks could go up. On the other side of things, if it is effective it could cause economic recovery and thus lowering the price of mining stocks. Let’s move on now to the second thing and main thing at the moment that is impacting these assets.
- Which Mining Stocks May Pull Ahead As Vaccines Are Shipped?
- Do These Mining Stocks Have Potential For 2021?
Stimulus Bill Approved, Metal Prices Fall
The second thing that is affecting the price of metals and mining stocks is government stimulus. There has been a bill in talks in the Senate for $908 billion of government stimulus. This was to go to citizens, vaccine distribution, small businesses, and more. Well, the deal which ended up falling right under $900 billion, has gone through. This will issue $600 stimulus checks to many American people. This has caused some people to speak out, saying that the number is too low to live on.
As a result of stimulus checks not being the $1200 some predicted, the bill passing did not cause an immediate rise in mining stocks. But time will tell if when this money starts being distributed, if prices could go up. Some analysts predict that gold will reach above $2000 this year, others think it could surpass $2500 in 2021. These are quite ambitious predictions, but anything is possible in the market as you have seen in 2020.
The Current State Of Mining Stocks
So what should investors of mining stocks do right now? Some may be distraught when looking at the above information, thinking this market is too complicated to invest in. The issue with that mindset is there is actually plenty of room to invest in mining stocks at the moment. But if you are looking to invest, it is key that you take the appropriate steps in order to do so. First of all, proper research is essential. Look at things like how much volume a mining stock has on any given day for example. The next step into doing essential research is to always be up to date on a company’s most recent advancements, and what could be coming in the future.[Read More] Mining Stocks Are Impacted By This Recent News
Third, look at the sector in a generalized way of research. For example, look at things that are happening in the world that can end up affecting the price of precious metals which will in turn hurt or help[ mining stocks. As you have seen, the price of gold went above $2000 at one point this year. It shows the potential that mining stocks could have in the future as well. But only time will tell where this sector will end up next. For now, there are plenty of great mining stocks to watch. Those are the things that are affecting the price of those mining assets the most.
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