On Tuesday, unexpected and significant monetary easing policies from China drove expectations of increased demand, causing U.S. metals and mining stocks to surge. The Metals and Mining ETF (XME) jumped 4.2%, marking the strongest single-day gain since 2024. In addition, gold prices hit a new high of $2,638 per ounce, silver prices rose by 1.2%, and copper prices soared over 3%.
To stimulate the domestic economy, the People’s Bank of China (PBoC) announced a series of stimulus measures, including a 50-basis-point cut in the reserve requirement ratio, expected to spur bank lending, and reduced policy rates, giving heavily indebted industries some breathing room. More importantly, these measures are seen as a strong signal of further potential monetary easing.
As the world’s largest raw material consumer, China’s new monetary easing measures have boosted global demand for raw materials, pushing up metal prices and mining stocks. The SPDR S&P Metals and Mining ETF (XME) rose by 4.2%, marking its best single-day performance since November 2023.
Zachary Hill, Head of Portfolio Management at Horizon Investments, stated that China’s stock market and interest rate policy measures have sparked an international stock surge, with U.S. metal and mining sectors, sensitive to Chinese developments, showing significant gains.
The commodity market also saw a surge.
As of 10:30 a.m. Eastern Time, U.S. crude oil rose by $1.19, closing at $71.56 per barrel, while Brent crude increased by $1.27 to $75.17 per barrel.
On Tuesday, gold prices set another record high, rising 0.3% to $2,638 per ounce, due to expectations that global central banks will provide more liquidity. Last week, the Federal Reserve also cut rates by 50 basis points to 4.75%-5%. Additionally, prices of metals such as silver and copper rose, boosting stocks. The Global X Copper Miners ETF (COPX) rose over 6%, while the Global X Silver Miners ETF (SIL) increased by 2%.
Shares of copper and lithium miners went up, with Freeport-McMoRan rising 7.9%, Southern Copper up 7.2%, Albemarle increasing by 1.97%, and Arcadium Lithium up 3.2%.
