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Gold Hits Six-Week High, Spelling Good Times for Precious Metals Sector

By Jim Silva on 10/10/2017

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The value of gold is suddenly rising. What does this mean for the precious metal mining industry, and will this trend last?

Buoyed by the dollar’s declining value, the price of an ounce of gold reached $1,346 on September 8th. For many investors, this sudden spike strongly suggests that now is the time to bet on the precious metals sector.

As Dollar Goes Down, Gold Goes Up

Gold’s recent surge in value came on the heels of a dip in the US dollar index to 91.35, its lowest level since June of last year.

This isn’t the first time that the dollar’s value has correlated with that of gold. In 2016, the US dollar index increased 34% to 103, while gold prices fell by that same percentage. In contrast, gold reached its highest value in 2011, when the index was as low as 75.

This is all promising news for an industry that’s been looking for an upturn in prices. Following 2011’s high point, gold prices fell steadily, a trend interrupted only by small, sporadic spikes. Even as recently as mid-June, value was decreasing. Since then, however, it’s posted consistent gains, with little sign of declining.

Time to Invest?

The rising value of gold will affect the entire precious metals sector, leading many to conclude that now is the time to invest in the precious metals market. NASDAQ outlines five separate precious metal mutual funds with promising year-to-date returns, minimal initial investment requirements, and low expense ratios.

All of these mutual funds invest their assets in the securities and stocks of companies dealing in gold and gold-related activities like mining and exploration, in addition to dealing in other types of precious metals. The mutual funds spotlighted by NASDAQ are Vanguard Precious Metals and Mining (VGPMX), Fidelity Advisor Gold A (FGDAX), Van Eck International Investors Gold A (INIVX), Oppenheimer Gold & Special Minerals A (OPGSX), and Fidelity Select Gold (FSAGX).

Mining Companies Need Optimal Working Conditions

In order to capitalize on this trend and deliver for investors, mining companies should avoid costly maintenance and maximize productivity. Dust control is an effective method of minimizing overhead for mining operators by ensuring stable access and haul roads without the need for constant watering, grading, and restructuring.

Midwest Industrial Supply, Inc. knows the amount of work that goes into ensuring that roadways remain reliable, which is why we’ve spent decades perfecting dust control products and solutions that get the job done. Rather than dealing with high levels of fugitive dust and degrading roads, effective dust control prevents these problems before they start.

Our products like EK35® and EnviroKleen® are environmentally-friendly and independently certified, working to lock fines into the surface of your roads. With consistently efficient and safe worksites, mining companies, mutual funds, and investors alike will be able to yield the maximum value during this boom time for precious metals.

 

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Jim Silva

Written by Jim Silva

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