The announcement of QE3 is not bringing a “sell the news” reaction at all when it comes to the metals market. Gold is surging, but The Devil’s Metal of silver is significantly outperforming gold. What is more impressive is the move seen in the miners of each.
Silver Rules! iShares Silver Trust (NYSEMKT: SLV) is up 4.1% at $34.29 and the lower cost ETFS Physical Silver Shares (NYSEMKT: SIVR) is up 4% at $34.25 on the day. The Global X Silver Miners ETF (NYSEMKT: SIL) is up over 6% at $23.97 on the day. Silver Wheaton Corp. (NYSE: SLW), a leader in silver, is up 4.4% at $37.81 and the troubled Hecla Mining Co. (NYSE: HL) is up over 6% at $6.17. Pan American Silver Corp. (NASDAQ: PAAS) is up 5.5% at $19.60.
The show on gold is continuing. The SPDR Gold Shares (NYSEMKT: GLD) is up 2% at $171.30 and the lower-cost ETFS Physical Swiss Gold Shares (NYSEMKT: SGOL) is up 2% at $174.60. The gold miners are also outperforming the gold metal as well. We are seeing the Market Vectors Gold Miners ETF (NYSEMKT: GDX) up 4% at $52.01 and the Market Vectors Junior Gold Miners ETF (NYSEMKT: GDXJ) is up 3.6% at $23.94. Newmont Mining Corp. (NYSE: NEM) is up 5% at $55.18 and Gold Fields Ltd. (NYSE: GFI) is up 3.4% at $12.73.
The reason for the move is simple enough. More QE just means more inflation. Maybe not today, and maybe not tomorrow. More dollars going into the system debases paper money. YOu can’t expect the gold bugs or the silver bugs to believe that the value of the currency is better off with more money being injected into the banking system.
JON C. OGG