The production cuts that mining companies made months ago are finally starting to pay off. The 22-member Bloomberg Americas Mining Index is heading for its biggest gain since August on speculation that shuttered output will start to erode global metals gluts. Adding to the excitement was Wednesday’s plunge for the dollar, which bolsters the appeal of gold and other commodities as alternative investments. Freeport-McMoRan Inc. and Newmont Mining Corp. had the largest advances among companies tracked by the Standard & Poor’s 500 Index.

David Fuller's view

Here is a copy of the Bloomberg Americas Mining Index. It has returned to the region of its late-2001 to early-2003 base formation.  Earnings are terrible for this highly cyclical sector and some dividend reductions are occurring.  Nevertheless, medium to longer-term recovery prospects should be excellent.