Gold & Silver Miners Love Low-Rate Outlook (SLW, PAAS, GG, NEM, KGC, AEM, GDX, GDXJ, SIL)

Investing

Published: January 25, 2012 3:07 pm

Last Updated: April 27, 2020 10:27 pm

Silver and gold miners just got some great news today after having lost so much luster in recent months. The FOMC has now telegraphed that it expects that interest rates will remain exceptionally low through at least the end of 2014. While an expectation is not a formal pledge nor a formal promise, this is much longer than what the public had been told over and over before. The prior language was “through at least mid-2013″…

Silver Wheaton Corporation (NYSE: SLW) is up 6.7% at $34.07, and the 52-week trading range is $25.84 to $47.60.

Pan American Silver Corp. (NASDAQ: PAAS) is still only flat at $21.85 but it was lower before the FOMC comments today. The 52-week trading range is $19.93 to $43.06.

Goldcorp Incorporated (NYSE: GG) is up 5.2% at $46.70, and the 52-week trading range is $39.93 to $56.31.

Newmont Mining Corporation (NYSE: NEM) is up 3.4% at $59.43, and the 52-week trading range is $50.05 to $72.42.

Kinross Gold Corporation (NYSE: KGC) up over 6% at $11.23, and the 52-week trading range is $9.96 to $18.25.

Agnico-Eagle Mines Limited (NYSE: AEM) up 8% at $37.23, and the 52-week trading range is $34.36 to $76.49.

ETFs are rocking as well. The Market Vectors Gold Miners ETF (NYSE: GDX) is up 5.3% at $54.58 against a 52-week range of $49.22 to $66.98. Market Vectors Junior Gold Miners (NYSE: GDXJ) is up 6.5% at $28.66 against a 52-week range of $22.58 to $42.97. The Global X Silver Miners ETF (NYSE: SIL) is up 3.9% at $23.69 and the 52-week range is $19.05 to $31.34.

The logic is simple enough… This signals extremely low interest rates and low costs of borrowing. It also signals that investors will have to look elsewhere yet again to seek higher returns than short-term and intermediate-term Treasuries. As this means that rates will be low in the U.S. for longer than expected, that is going to drive a weak dollar policy as long as things remain static in Europe and in other major economic zones. That is the perfect storm for gold and silver as they are often inversely correlated to the dollar.

JON C. OGG

Take This Retirement Quiz To Get Matched With An Advisor Now ^(Sponsored)

Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.

Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.

Click here now to get started.