LONDON – Mining companies led gains on London’s FTSE bluechip index on Wednesday as Republican Donald Trump’s victory in the U.S. presidential election spurred hopes for higher metal demand and drove investors to buy gold as a shelter against economic uncertainty.
The FTSE mining index rose around 5 percent to its highest level since May 2015 led by gold and silver miner Fresnillo. In his victory speech Trump reiterated that he had a great economic plan and would embark on a project to rebuild U.S. infrastructure and double U.S. economic growth.
Analysts said they were reassessing their commodities outlooks following the Trump victory and a strong rally this year, which has reversed the trend of 2015 when raw materials and mining companies crashed, has yet to lose momentum.
“The 2016 rally could have more to go, their (the miners’) outlook is a lot brighter now,” Chris Beauchamp, senior market analyst at derivatives trader IG Group, said.
Gold prices have risen about 25 percent since the start of the year, but are down from two-year highs after Britain’s vote to leave the European Union in June, while other commodities, such as coal and zinc, have climbed more. Beauchamp predicted diversified miners would gain more than gold miners over the longer term.
For the rest of this article, click here: http://www.reuters.com/article/us-usa-election-miners-idUSKBN1342XV