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Mining p2
The miners are well off their lows
The table above details all the UK 100 miners’ performances over the past year. You can easily see that they are all trading well off their 12-month lows. While a return to the highs would be an unrealistic expectation, the miners are still showing an attractive amount of upside. On the other hand, precious metals miners Randgold Resources (RRS) and Fresnillo (FRES) are trading relatively close to their 12-month highs, evidence of a bygone year of heightened uncertainty that’s boosted safe haven demand for gold and silver. Will this trend now start to correct itself, given renewed confidence in the equity markets? Quite simply, no other UK 100 sector offers this kind of recovery/growth potential. That’s why mining remains one of the most followed sectors on the UK Index .
A sector breakout
Yet more encouraging is the mining sector index (below), which has staged a breakout above May 2015 falling highs and its 100-day moving average, together with both a recent and potentially imminent bullish cross. With an initial pullback – on ‘buyers’ remorse’ – itself bouncing back up off what now appears to be support, could the worst really now be behind the miners?
mining index, 12-month chart
Source: Bloomberg, 1 March
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Prepared by Michael van Dulken, Head of Research
