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Canada’s mining industry saw a positive start to the year with the EY Canadian mining eye index rising 5% in the first quarter of 2019 (Q1 2019) from Q4 2018, Ernst & Young announced Thursday.

Following an 8% quarter-over-quarter gain in Q4 2018, gold prices continued to increase by 1% in Q1 2019, EY says. This was due, in part, to the possibility of fewer U.S. Federal Reserve rate hikes in 2019 and will likely continue to benefit gold prices in the near-term.

“Gold production estimates are up in Canada with several major projects expected to begin or expand production this year,” Jay Patel, EY Canada’s mining and metals transactions leader, said in a statement. “Capital expenditures are also increasing reflecting renewed confidence in the sector.”

Base metal prices also fared well in Q1 2019. A surge in demand for electric vehicles (EVs) boosted nickel prices by 22% following a 15% decline in Q4 2018, EY said. The outlook for nickel remains positive with ongoing demand for stainless steel and reduced inventory levels.

Similarly, zinc and copper prices increased by 19% and 9%, respectively, in Q1 2019, and are likely to benefit in the near-term from declining inventories and tight market conditions.

“Improving market conditions are inspiring new confidence in the mining and metals sector and putting growth back on the boardroom agenda,” Jeff Swinoga, EY Canada’s mining and metals leader, said in a statement.

EY research suggests that mining and metals deal activity will continue to shift from divestment-led to investment-led with a focus on replenishing portfolio growth options in the near-term.