In the duration of 2020, mining stocks have had quite the interesting run. When the year started, things were seemingly normal for the price of metal assets. That is until the pandemic went into full takeover mode in March. This caused the entire stock market including mining stocks to crash. That is back when things in the market were uncertain though. Right when the market started to pick back up, mining stocks started booming. The crashing of the economy and value of the US dollar resulted in massive upticks for mining stocks. This is because precious resource prices shot up as well.
So where are we at in December 2020? Well, there is actually a lot of recent news that is impacting the direction that mining stocks are moving. The first of which is stimulus bill news that has been at the top of the headlines recently. Also affecting news is the COVID-19 vaccine that is being distributed to much of the world at the moment. There is also very recent news that is affecting the price of mining stocks that we will jump into in a moment. But just know, there are plenty of great mining stocks to watch in the market at the moment. Although things are very volatile, proper research and smart investing can go a long way in a market that has been bullish most of 2020. Let’s now talk about some reasons that mining stocks have been trending upwards in the market.
Jobless Claims Impact Mining Stocks
Jobless claims have always been something that will affect mining stocks. So when new reports come out, it can move the price of mining stocks up or down. But this has been more of a notable thing in 2020 due to the high unemployment caused by the pandemic. 2020 saw some of the highest unemployment numbers seen in history. That is part of the reason that precious metals like gold were able to go up in price so much. Now a new report has come out from the U.S. Labor Department on December 23rd. On the week that ended December 12th, jobless claims fell by 89,000 to a total 803,000. This number was up from the 892,000 claims the previous week.
This data was better than expected compared to what the market consensus was thinking. Initial claims were thought to be around 882,000 for the week. The four week moving average for new claims went up 4,000 claims from the previous week to 818,250. Continuing jobless claims, a statistic that includes people already receiving benefits was at 5.337 million, down 170,000 week over week. Jobless claims like this can have a great affect on mining stocks sometimes, while this time it was less notable. That is because one piece of news is impacting them more, which we will talk about next.
Stimulus Bill Changes Bring Up Mining Stocks
So we’ve talked about how jobless claims can affect mining stocks. Now let’s talk about the stimulus bill that has been negotiated in the Senate for weeks at this point. The bill finally passed in the Senate recently. One of the controversial highlights was $600 stimulus checks going to most Americans. Many believe that this is not nearly enough to cover costs of living, and make up for all of the financial loss in 2020. The $900 billion Covid relief bill passed by Congress, was called a “disgrace” by President Trump in a tweet.
Trump then called for the stimulus check number to be raised to $2000 instead of the original $600. House Speaker Nancy Pelosi, who is usually in disagreement with Trump, agreed with the call for $2,000 payments. Despite this, Trump did not threaten a veto. This is because a veto could cause the government to shut down. It is believed that Congress passed the bill with veto-proof majorities regardless. As the President pushes for these higher checks, the price of gold and silver has moved up. More government stimulus means the value of the dollar gets hurt. This means that mining stocks could see an uptick if the dollar amount of stimulus checks is increased. Only time will tell, likely we will know by New Year’s what will truly happen with this stimulus bill.[Read More] Do These Mining Stocks Have Potential For 2021?
Investing In Mining Stocks
When looking to invest in mining stocks there are plenty of factors you want to take into consideration. Blindly investing in a company just because you see its going up is probably not the best move. So what things should you look for when finding the top mining stocks to watch? Well, the first thing that should be considered is a company’s volume on any given day.
If a stock is rising upwards but its volume is low, it could be a sign that it is about to move lower soon. Keeping up with the most up to date news is very important as well. If you look at data coming from specific companies and stay posted on the newest information, it could give you an advantage over those who are not doing the same. Current events in the real world are important too because they affect these mining stocks as well. That is the best way to discover the top mining stocks to watch.
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