An intake of experienced mining industry veterans into the boardroom and rising precious metals prices were the twin catalysts propelling Hycroft Mining (HYMC +7.31%) stock to a satisfying gain on Wednesday. The gold and silver specialist's equity closed the day more than 7% higher.
Boost to the board
Shortly after market close on Tuesday, Hycroft announced the appointment of four new individuals to its board of directors, effective that day. Each is a seasoned executive in the precious metals industry, adding significant heft and expertise to the board, which now comprises nine individuals.
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The group comprises Richard O'Brien, the former CEO of fellow precious metals miner Newmont, current AngloGold Ashanti Macelo Godoy, onetime president of America for Freeport McMoRan Josh Olmstead, and Blake Rhodes, who served as Newmont's general counsel.
This influx of experts coincided with a rally in gold and silver prices, ignited on Wednesday morning by an influential jobs report. This was Automatic Data Processing's monthly payroll data digest, which indicated job growth was quite a bit lower in August than in the preceding month. It also fell short of market expectations.
With this suggestion of a softening economy, many began speculating that the U.S. Federal Reserve (Fed) might be less eager to raise interest rates. Precious metals prices had been slumping in recent days on worries that hikes were increasingly likely.
Gold, silver, and other high-value metals don't pay interest tied to rates, so demand for them tends to rise when rates aren't increasing.
NASDAQ: HYMC
Key Data Points
Rate concerns
The expansion of Hycroft's board to accommodate more experts is unquestionably a positive development, and the company deserves a stock price bump simply because of it.
As for precious metals prices, that's more of a question mark.
While the ADP report is influential and important, it's far from the only thing impacting Fed rate decisions. What's far more critical is inflation. So if it remains a problem, with or without meaningful job growth, we can surely count on rate increases. All investors active with precious metals holdings should regularly monitor inflation for this reason.
