Gold Breaks Records On China's Policy Stimulus: Mining, Metal Stocks Exhibit Strongest 1-Day Rally In 2024

U.S. metals and mining stocks posted their strongest one-day rally of 2024 on Tuesday, driven by China’s unexpected and substantial monetary easing.

The People’s Bank of China’s (PBoC) stimulus measures, including cuts to the reserve requirement ratio and repo rates, boosted global demand for raw materials, sparking a surge in metal prices and mining stocks.

The SPDR S&P Metals & Mining ETF (NYSE:XME) surged 4.2%, marking its best one-day performance since November 2023. The move reflected heightened optimism in the sector, which benefits heavily from demand in China, the world's largest consumer of raw materials.

Chart: Metals & Mining Stocks Mark Best Day In Almost A Year

Precious, Industrial Metals Shine

Gold prices hit yet another fresh record on Tuesday, rising 0.3% to $2,638 per ounce, the highest in history, as the metal benefited from expectations of higher liquidity from global central banks.

The People’s Bank of China’s 50-basis-point cut to the reserve requirement ratio is expected to boost bank lending, while the reduction in key interest rates provides relief to heavily indebted sectors. This move is also seen as a strong signal that further monetary easing may be on the horizon.

Silver jumped 1.2%, while copper saw an even bigger rally, surging over 3%. The broad gains in metals prices were driven by expectations of increased Chinese demand, as the country’s easing measures are aimed at stimulating domestic economic activity.

Last week, the Federal Reserve slashed interest rates by 50 basis points to 4.75%-5%, offering another strong tailwind to metal commodities.

Mining Stocks, ETFs Post Gains

Mining-related stocks and ETFs are enjoying strong performance Tuesday. The Global X Copper Miners ETF (NYSE:COPX) climbed over 6%, reflecting the sharp increase in copper prices, while the Global X Silver Miners ETF (NYSE:SIL) rose 2%.

Here's a look at the five strongest performers within the SPDR S&P Metals & Mining ETF stocks on Tuesday