Silver prices soared to a 10-month high of around $17 an ounce early Tuesday morning. The weaker dollar and the rising crude oil price tend to tamp down deflation concerns, even to a degree that could raise hopes among precious metal traders for a little more inflation.
Silver prices went on a tear Monday morning, following the news on the failure of the Doha talks to reach an agreement from producers regarding a freeze on output. Oil prices plunged initially, but recovered to close the day higher as the dollar continued to weaken against the yen.
Mining stocks have followed silver prices higher, with some pretty impressive gains. Silver Wheaton Corp. (NYSE: SLW) added about 7.5% Tuesday morning to trade at $18.20; Hecla Mining Co. (NYSE: HL) added around 8% to trade at $3.62; Coeur Mining Inc. (NYSE: CDE) added about 6.5%, trading around $7.24; and Pan American Silver Corp. (NASDAQ: PAAS) traded at $13.69, up about 6.7%.
To some degree, silver prices are still trying to catch up to gold prices. That indicates that an investor who may be looking to add to a gold stash may want to have a look at “underperforming” silver.
Industrial demand for silver is greater than demand for gold and that helps boost the price. Speculative positions in silver futures have also increased, jumping 30% in the week ending April 12 to 56,018 net long contracts, according to the Commodity Futures Trading Commission’s Commitment of Traders report. The number of gross longs held by non-participants reached 86,886, the highest level in a dozen years according to Kitco.
Silver Wheaton stock is up almost 47% year to date, while Hecla shares are up nearly 92% in the same period. Pan American Silver is up almost 112% and Coeur Mining is up more than 190% as of around noon. And the biggest share of the gains has come since the beginning of March.
Silver Wheaton traded up 8.8% at $18.42 in the afternoon on Tuesday, in a 52-week range of $10.04 to $21.12. The consensus price target on the stock is $21.16.
Hecla Mining stock traded up nearly 10% at $3.69, a new 52-week high. The 52-week low is $1.45 and the consensus price target is $2.71.
Coeur Mining traded at $7.27, up 7%, after posting a new 52-week high of $7.29. The 52-week low is $1.62 and the consensus price target is $5.24.
Pan American Silver traded up 8% at $13.86, after posting a new 52-week high of $14.04. The 52-week low is $5.38 and the consensus price target is $10.67.