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Mining Stocks Up As Market Rises

Australian shares rose on Thursday, boosted by miners and gold stocks. The Fed’s decision to raise rates was expected, but eased concerns about the pace of future increases. As of 0025 GMT, the S&P/ASX 200 index had climbed 0.8%. It had gained 0.23% on Wednesday. Mining stocks are usually volatile and can be a good choice for investors who are seeking long-term growth.

The sector continues to attract investors due to its steady flow of raw materials. Gold miners, in particular, are trading at historically low multiples, compared to net asset value and cash flow. Investors are betting that these companies will be able to deliver on production and cost guidance. As the price of gold and silver rises, mining stocks will likely follow suit. A number of exchange-traded funds hold top-quality global miners at affordable prices.

The mining industry is cyclical, and demand for the materials mined usually declines during recessions. However, the threat of higher interest rates could push inflation higher, which could tip the global economy into recession. Some analysts believe the market is already at the peak of its bull run, and bargain-hunting may be a good time to invest in mining stocks. But the question is how much of it is a buy?

There are two types of mining stocks: majors and juniors. The majors have long-term track records of success in mining and typically operate global mines. Their methods of exploration and output are reliable and consistent year after year. Juniors, on the other hand, often invest in riskier ventures. If one of them succeeds, the results could increase the value of a mining company’s stock. Therefore, investing in junior mining stocks is a great way to maximize your profits.

While junior mining stocks are riskier than their major peers, they are still well-positioned for future growth. Junior mining companies are still in the early stages of discovery, refinement, and selling of a commodity. As such, they carry a higher risk. The major mining stocks are more established in the industry and pay dividends. Majors also pay dividends, while juniors reinvest their earnings to fund growth.

While Canadian stock prices rose, the impact of Canadian resource stocks was mixed, as a strong Chinese survey showed that the country’s vast manufacturing sector expanded at its fastest pace in 14 months in December. Employment and new orders also rose, which is good news for mining stocks. Despite the broader market decline, the outlook for global growth remains uneven, with Europe still stuck in low-growth mode and the United States showing signs of recovery.

If you’re concerned about the economy, mining stocks are a good way to relieve the stress and anxiety that many investors are feeling. These stocks are stable, and if the prices of commodities rise, mining stocks can help relieve some of your concerns. This is especially true in an environment where investors are moving into safer assets such as Treasurys. The prospect of making a profit in this sector will help your portfolio and provide you with an additional source of income.

Author

Nataniel Snider

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