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The price of silver has advanced nearly $10 an ounce in the last three months, pushing up share prices for several silver mining stocks.
By Melissa Pistilli—Exclusive to Silver Investing News
Silver’s recent astronomical rally has surged alongside gold as prices for the yellow precious metal continue to push past all time highs. Tuesday afternoon in New York, gold futures advanced to $1,425 an ounce before pulling back to $1393.20 at closing.
Flight-to-safety buying is once again receiving credit for another jaw-dropping rally in precious metals.
“With the Dollar showing signs of weakening again, gold prices providing bullish leadership and a number of global officials suggesting that US policies are increasing the odds of a serious inflation problem ahead, the bull camp in silver is seriously emboldened,” said Global Securities Futures Representative Jamie Greenough in a note to clients. “Other traders suggest that a failure of a US bond Insurer yesterday, renewed Euro zone debt concerns, conflict inside the US Fed and the uncertainty off the upcoming G20 meeting have presented the silver market with enough uncertainty that flight to quality buying is probably adding into the upward track in silver prices this morning.”
Over two years after the financial crash of 2008, nations around the globe, especially in the euro zone and including the United States, are still suffering from economic woes. There is increasing concern that EU governments such as Ireland and Greece are likely to face trouble repaying bondholders.
“Gold has now turned its eyes to the European sovereign- debt situation,” said Frank McGhee, head dealer at Integrated Brokerage Services. “It will continue to rally as a flight to quality.”
Fears that the US Federal Reserve’s continued quantitative easing measures will lead to inflation are also coloring market sentiment toward safe haven assets like gold and silver. The Fed’s announcement of a new debt repurchasing plan seemed to be the springboard for silver’s breach of the psychologically and technically important $25 an ounce level last week.
The fact that some of the world’s G20 leaders are not happy with the US Government’s decision to embark on another round of quantitative easing is also concerning. The BullionVault’s Adrian Ash points out the displeasure of China’s vice-minister for finance, Zhu Guanguyao: “We feel that [the US Fed’s decision to launch QEII] did not recognize its responsibility to stabilize global markets or the impact of excessive liquidity on emerging markets.”
Even more alarming, Russian officials are calling for the President of the United States, Barack Obama, to consult the Russian government and “other members of the global economy” before carrying out “such actions.”
As the price of the sometimes precious, sometimes industrial metal flirts with $30 an ounce, many silver bugs are hot under the collar at the prospect of the shiny metal zooming past its all-time record high of $50 an ounce reached in 1980.
As long as inflationary concerns and economic woes continue to dominate the market, the silver bulls may have reason to hope.
“With another significant range up extension today, the silver market appears to be on a track to make a run back to its all time highs, as the interest in protecting against, or participating in an inflationary environment is starting to entrench itself in the marketplace,” notes Greenough.
Silver mining stocks rising alongside silver prices
The price of silver has advanced nearly $10 an ounce in the last three months, pushing up share prices for several silver mining stocks.
Share prices for Great Panther Silver (TSX:GPR) have risen approximately 232 percent since August 9 to close at $1.74 Tuesday. On Monday, the company announced that surface drilling and underground development work at its Topia Mine had expanded high grade silver-gold-lead-zinc mineralization on the property.
Tarsis Resources (TSXV:TCC) has seen its share price nearly double since early August to close at .43 cents Tuesday. The junior explorer recently provided an update on prospecting work at its White River property located in the Yukon. One select float sample contained 19.3 g/t gold, 0.21% copper and 16.9 g/t silver.
Avino Silver & Gold Mines (TSXV:ASM) share price has climbed over 267 percent in the last three months to close Tuesday at $2.03. On Tuesday, the company announced additional high grade results from the San Gonzalo mine in Durango, Mexico with assays up to 13.95 g/t gold and 842 g/t silver.
The stock price of ECU Silver Mining (TSX:ECU) has nearly doubled from early August for a close of $1.16 Tuesday. On Monday, the silver miner announced the discovery of a new mineralization zone at its Santa Juana mine in Mexico.
CMC Metals’ (TSXV:CMB) shares have also almost doubled in the last three months, closing at .25 cents on Tuesday. Last week, the exploration company announced it had sold an estimated 170 tonne bulk sample extracted over the summer from its Silver Hart Mine. Announcement of the sale followed a previous report on first set of exploration assays from the company’s 2010 drilling program on the property.
Shares of Bear Creek Mining (TSXV:BCM) have more than doubled in the past three months to close at $8.55 Tuesday. On Friday, the silver explorer announced the closing of a $130 million bought deal financing, which it intends to use to fund the development of its Santa Ana project in Peru.