Commodities rally of 2016 leaves mining industry in “far better shape” says Investec
Investec, the financial analyst service across the UK, South Africa and Australia, believes that the mining industry could represent a ‘key sector’ for asset allocation, with particular strength in gold commodities.
The company, in a report released today, believes this is a result of strong commodity rallying and sustained cost cutting since the beginning of 2016.
“The turn of the year proved, in hindsight, to be the point of peak pessimism; since then, the mining industry has begun to heal itself and cleanse some of the sins of the past. We moved into cautious buy territory in April this year, by moving our Investec Mining Clock forward to 4 o’clock and have seen buying momentum continue, despite the recent Brexit vote,” said the company in a report.
“The rally in industrial commodities and oil that began early this year has matured into a broad stabilisation in many prices above cyclical lows. As a result, we believe the mining sector has finally become a serious choice among asset allocators, despite having been largely avoidable for the last five years.”
Gold has been identified as one of the top commodities moving forward, as the rally for the commodity is “symptomatic of a world beset by uncertainty.”