Last year was a crazy time in the world of mining stocks. The price of gold and silver reached levels it had never seen before in history. The price of gold peaked over $2000 per ounce which was great for investors of the yellow metal. The pandemic and resulting economic damage brought the price of these resources up a lot more. Silver received another boost when its use industrially was increased mid 2020 as well. We often wrote about what was affecting mining stocks throughout the year, and especially at the end of the year.
Now that January has arrived, there are many more world advancements that are impacting the price of mining related assets. It hasn’t seemed like there is a bad time to get involved with investing in mining stocks. 2021 could bring a whole new set of surprises in the sector for investors. That is why it is important above anything else to keep up with all of the things that impact the movement of mining stocks if you are looking to invest. With so many things impacting the price of gold stocks all the time, things can get confusing. So let’s break down a few things that are affecting the mining sector now that 2021 has started, because it is exciting.
Vaccine Distribution Continues, Mining Stocks Impacted
We learned in early December that multiple pharmaceutical companies had vaccine candidates that are at least 95% effective at combating the COVID-19 virus. Then we saw the approval come from the FDA for the United States to distribute the Pfizer vaccine. So where are things at now? Well, the United States has approved vaccines from Pfizer and Moderna. Other countries have approved these vaccines and some have approved the AstraZeneca vaccine from Oxford University as well. China intends on vaccinating 50 million people by January 15th. Many places are setting goals for vaccination and want to distribute as fast as possible. So how does all of this tie into mining stocks?
Well, as soon as people are vaccinated the economy can recover more. But at the moment, these vaccinations are not impacting mining stocks too much. Covid-19 numbers are still spiking and reaching new highs all over the world and especially in the United States. Many places have gone back into full lockdown like at the start of the year as a result. But these vaccines could have a grand effect on the price of mining stocks if a large amount of the population receives said vaccine this year. That is how vaccines could affect the price of mining stocks in 2021. Do you think this vaccine rollout will result in changes of the sector?
The Biggest Impact On Mining Stocks In 2021
So what is driving mining stocks the most at the moment you may be wondering? The answer comes in two forms; government stimulus and rising coronavirus numbers. Currently in the United States, 200,000 cases per day are being reported on average. In many other countries, covid numbers are rising exponentially as well. More covid cases means more lockdown all around the world. More lockdown all around the world results in the worsening of the economy. Thus the increase in mining related assets as a result. This is exactly what happened at the beginning of the pandemic back in March and April. Since cases are reaching new highs at the moment a similar trend may be what is happening. This shows in the price of precious metals at the moment, which is going up dramatically.[Read More] New Stimulus Bill Impacts Mining Stocks
Gold prices are above $1,900, actually at around $1,940 per ounce as of January 4th, 2021. Silver prices have also gone up, and are at $27 per ounce on average as of the same date. Government stimulus has also had an impact on the direction in which mining stocks move. Stimulus checks of $600 have already started going out to a large percentage of Americans. President Trump was even pushing for it to be increased to $2,000, but that has ultimately been rejected. The $900 billion stimulus spending plan has gone into affect which also is contributing to the price increase that gold and silver among other mining assets are seeing.
So now we await what will come in the future with mining stocks in 2021. Things changed in 2020 so much, anything can really happen this year. Some analysts even think that gold could push above $2,000 again, potentially even up to $2,500 per ounce. While this sounds ambitious, you never really know in this sector. Hence why it is important to stay updated on the things that are impacting the sector and which gold stocks to watch.
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