The mining industry is experiencing a resurgence right now and not only are precious metal prices on an upward swing, but so are precious metal stocks. It is no surprise then that the Canadian stock market, as measured by the S&P/TSX Composite Index is flying high right now. The index just closed above 12,000 for the first time.
Canadian stocks are doing great in this environment partly because precious metal prices are strong, but also because oil and gas prices are strong and financial stocks are doing well. What is happening in the Canadian market is a solid, broad-based rally that looks to have some real momentum at this time.
Not only are Canadian stocks doing well, but so is the Canadian dollar. International investors are voting their confidence in the Canadian economy by buying Canadian dollars and investing in the economy.
With renewed enthusiasm for the mining sector, investment opportunities are plentiful. One speculative mining company that I recently came across is EuroZinc Mining Corp. (AMEX/EZM). The stock also trades in Canadian dollars on the Toronto Stock Exchange.
This company is developing two substantial mines in Portugal that are known to contain copper, zinc, lead, silver, and indium, among other metals. The stock is hot right now and it looks like it will remain hot over the near-term.
Although mining shares can be very risky, you can make money by diligently investing in this sector. In my opinion, now is the time to do it because precious metals should continue to appreciate in value this year. As I’ve said many times before, 2006 is going to be the year of the metals.
Of course, you have to balance the speculative investment risk inherent in mining stock speculation within the context of a well- balanced portfolio. I do think, however, that there should be some allocation to this hot market sector at this time.