Coronavirus gold rush: value of largest precious metals miners in London soars £ 11 billion this year
More than £ 11 billion has been added to the value of London’s largest precious metals miners so far this year as gold and silver prices have soared.
Shares in FTSE 350 listed companies specializing in metals are up 94 percent on average.
The gold groups Polymetal, Petropavlovsk and Centamin, and the joint silver and gold miners Fresnillo and Hochschild Mining, have all benefited from the price hike brought about by the coronavirus crisis as investors have sought safe havens in tumultuous stock markets.
Shares in FTSE 350 listed companies specializing in metals are up 96 percent on average
Last week, gold prices soared to record highs, breaking through $ 2,000 an ounce for the first time ever.
The yellow metal is up more than a third since the start of 2020 – and bullish analysts think it could continue to climb as high as $ 3,500 in the coming years.
Gold is seen as a safe way for an investor to store value in times of economic uncertainty.
Prices have risen recently as virus cases have continued to rise and governments have unveiled multi-billion dollar stimulus plans and cut interest rates.
This means that generally safe and reliable investments – such as government bonds – can yield almost no return.
Silver prices have also risen more than 30 percent this year.
And analysts think it will do well if the global economy recovers as it will boost demand for silver, which is widely used industrially.
Experts at Citigroup have also said that if Joe Biden wins the US presidential election, the price of silver, which is currently around $ 26.55, could rise if he delivers his sweeping green infrastructure plan.
Precious metal mining companies of all sizes have been boosted by the rise in prices, making everything they produce more valuable and can add a hefty amount to profits. But other factors have also contributed to a rocket being placed among the stocks.
Shares in FTSE 350 listed companies specializing in metals are up 94 percent on average
Fresnillo, listed on the FTSE 100, which has seven mines in Mexico, recently reported that it had extracted 3 percent more silver than expected between April and June, which was described by Jefferies analysts as a “ truly standout achievement, ” taking into account mines had been shut down in the country due to the corona virus.
Fresnillo is the best-performing blue chip stock of the year so far – with a market value more than doubling from £ 4.7 billion at the start of the year to £ 9.5 billion today.
Russian prospector Polymetal is the third best performing Footsie publicly traded group, up 69 percent, also to £ 9.5 billion.
It also saw gold production outperform last year – by about 2 percent – during the second quarter.
On the mid-cap index, the Egypt-focused Centamin has added more than £ 1 billion to its market value, up 73 percent to £ 2.5 billion.
The Latin America-focused Hochschild is up two-thirds to £ 1.5 billion, and recently gained a lift when it said it would meet its full-year target, despite being hit by Covid closings that cut work in. are mines in Peru and Argentina.
And Russian prospector Petropavlovsk has skyrocketed 162 percent to £ 1.1 billion.
It produced 39 percent more gold in the first half of 2020 as years of investment in a highly specialized gold processing plant paid off.
But it’s gripped by a bitter row between management and shareholders – and yesterday, former boss Pavel Maslovskiy and founder Peter Hambro were among the executives impeached in a crunch vote cast by an activist investor, Everest.