TORONTO (miningweekly.com) – The gold mining industry seems to have started winning back investor confidence after an 18.5% spot gold price rally since the start of the year. The world’s largest gold producer Barrick Gold’s TSX-listed stock jumped 75% to C$18.40 apiece in the year-to-date period, as gold received renewed investor interest on the back of continued global economic uncertainty.

Gold mining stocks have risen in the wake of the global economic slowdown and the collapse of commodity prices, which had taught the industry to cut costs, to clean up balance sheets by improving cash flows and reducing debt, and to streamline portfolios by selling noncore assets.

Gold on Friday traded at about $1 258/oz, up from just more than $1 050/oz early in January.

The collapse of gold prices from its five-year highs of $1 880/oz in 2011 had left a bad taste in many an investor’s mouth, as senior miners reeled under increasingly strained balance sheets as a result of ballooning debt levels. Net debt in the mining sector rose no less than 500% in the last ten years from about $60-billion in 2005, to about $360-billion today.

Senior gold miners also booked billions of dollars in asset impairments as expensive new projects stalled and the low-price environment rendered operational assets and projects less valuable, which helped drive the share price of the top five gold producers down 60% in the last decade.

A faster-than-expected economic slowdown in China had also placed a damper on most commodity prices and, along with other global geopolitical risks, had created macroeconomic uncertainty that was driving gold upwards, as investors flocked to buy the precious metal as a store value, as gold was seen by some as the only real currency in the world through time.

Signs that the US Federal Reserve would not further increase interest rates this year also supported a higher price. As interest rates rose the general tendency was for the gold price, which earned no interest, to fall and, as interest rates dip, for the gold price to rise.

Barrick’s NYSE-listed stock turned a corner on January 19, having nearly doubled since then. Newmont Mining was up 48.32% on the NYSE at $26.96 a share since January, while Goldcorp was up 39.21% at $16.50 apiece.

In Australia, Newcrest had risen by a third since early this year, while OceanaGold was up 38%.

Even miners active in riskier jurisdictions had seen a significant uptick in stock market activity, such as Randgold Resources being up 46.7% on the Nasdaq, Endeavour Mining being up 39.69% at C$10.65, Kinross Gold up 55% at C$3.94 and Nevsun Resources being up at 21.75% at C$4.60 apiece.

Precious metals streamers were also up, with Silver Wheaton being up 32% for the year to date at C$22.71, Sandstorm Gold up 18.51% at C$4.15, Franco-Nevada Corp up 24% at C$81.23, and Royal Gold up 27.55% at C$66.41 apiece.

The S&P/TSX Global Mining Index had risen 16.64% since the start of the year to 51.75 points. That was, however, still down 14.82% over the last five-years, but outperformed the S&P/TSX Composite Index growth of 2.84% so far this year, with a 0.38% decline in the five-year period.

At current stock prices, Barrick was still down 61% over the five-year period, with the largest miners still reeling from significantly lower stock valuations.