Miners dig themselves from the trench

Motley Fool General Manager Bruce Jackson recently wrote that he has his finger waiting patiently on the ‘Buy’ button for BHP Billiton (ASX: BHP) to dip below $30 per share — he could be waiting for a while.

BHP yesterday joined other resource companies to lead the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) to its highest level in six weeks, with the index finishing on 4,965.7 points – a 1.3% rise for the day. BHP saw a gain of 3.17% and closed at $32.84, and fellow miners such as Rio Tinto (ASX: RIO) and Fortescue Metals Group (ASX: FMG) climbed 3.68% and 2.68%, respectively.

The gains were realised following reassuring comments from the Chairman of the US Federal Reserve, Ben Bernanke. Bernanke pleased investors by saying that the accommodative monetary policy is needed for the foreseeable future, and suggested that interest rates could be increased slightly when US unemployment hits 6.5%.

Foolish takeaway

After hitting a low of $30.76 on Monday, BHP’s current price reflects a 6.8% gain for the week. Although there is heavy volatility in the mining sector, BHP’s projects are more diversified than a number of other companies in the industry, making it more appealing. On the other hand, with some experts predicting that iron ore will fall to around US$100 per tonne next year, investors could yet be presented with an even more attractive price than what it is being offered for today.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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