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Gold Miners Breathe a Sigh of Relief

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Mining companies gain

The turmoil in the stock markets has been felt in all sectors. However, the mining industry seems to have been spared this time. After struggling with falling prices for almost five years, mining stocks appear to be set for a rally with the rise in the price of gold.

Mining companies that have seen larger gains over the past five trading days include IAMGOLD (IAG), Barrick Gold (ABX), and Centerra Gold (CG). These three equities gained 16%, 18.7%, and 18.8%, respectively, on a five-day trailing basis. Over the past month, these three stocks saw price increases of 12.8%, 16.4%, and 4.2%, respectively. These three companies make up 9.1% of the price changes in the VanEck Vectors Gold Miners ETF (GDX). GDX has gained 8.9% over the past five trading days and 5.7% over the past month.

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Currencies impacted

Though the Global X Silver Miners ETF (SIL) has risen by 3.4% over the past five trading days, it’s fallen by 1.4% over the past month. The US Dollar Index gained 0.33% on Thursday but has lost about 0.09% in the past five trading days. Other currencies also showed weakness amid the stock market turbulence. However, the yen, which is considered a haven asset, touched an almost a three-month high against the US dollar on Wednesday, January 6.

Investors deserted precious metals in 2015, leading to a fall of 10% in gold and almost 12% in silver. The safe-haven bids for gold may be short lived as the Fed is considering another interest hike, which could cause non-yield bearing gold to plunge.

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