Precious metals shares enjoyed a bright start to the week as traders grew more confident that the US Federal Reserve is edging closer to cutting interest rates.
Lower rates tend to weaken the dollar and reduce the “opportunity cost” of holding gold and silver, which do not pay interest.
When the prospect of a cut grows, bullion often rises and the shares of miners follow.
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) (up 3.6%) and Fresnillo PLC (LSE:FRES) (ahead 2.5%) were among those gaining ground as the gold price continued to firm.
Elsewhere, in the sector, BHP Group Ltd (LSE:BHP, ASX:BHP) confirmed it would not return with a second attempt to buy Anglo American PLC (LSE:AAL) after its initial approach was rejected, a decision that calmed nerves about an extended takeover battle and helped steady sentiment across the wider mining industry.
As the drama played out over the weekend, it left both BHP and Anglo little changed, though analysts raised a collective eyebrow over BHP’s flip-flopping strategy.
On a lively day for the diggers, investors pushed up Glencore PLC (LSE:GLEN), which climbed 1.8%, and copper miner Antofagasta PLC (LSE:ANTO), ahead by 1.6%.
Copper prices have been resilient thanks to expectations of stronger demand from electrification projects and data showing steadier global manufacturing activity.
The mix of rate optimism, firmer metals prices and easing takeover pressures gave the resources sector a broadly upbeat tone.