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Silver crossed the $30 per ounce mark for the first time in decades last week, driven by strong investment and industrial demand. Fresh bets on Fed rate cuts, sticky inflation, an estimated fourth annual deficit, rising geopolitical tension and uncertainties ahead of general elections in major economies added to the strength.
Notably, the white metal is one of the best-performing major commodities so far this year, having risen 32% and outperforming gold. The outperformance of silver can be attributed to its role as a precious metal and as an industrial metal.
Silver miners also spiked as these are the biggest beneficiaries of a surge in the metal’s prices. These act as a leveraged play on underlying metal prices and thus tend to experience more gains than their bullion cousins in a rising metal market. Some top-ranked silver miners like Avino Silver & Gold Mines Ltd., Fortuna Silver Mines Inc. , Hecla Mining Co. and Buenaventura Mining are poised to gain further as the solid trends are expected to continue for some time.
Strong Trends Are Here to Stay
Silver is often used as a means of preserving wealth during times of financial and political uncertainty, and usually does well when other asset classes struggle. Factors such as the forthcoming U.S. presidential election, the ongoing Russia-Ukraine war and the Israel-Hamas conflict enhance the metal’s attractiveness to investors.
The latest data on inflation has fueled hopes that the Fed could cut interest rates twice this year. A lower interest rate environment raises demand for silver as the precious metals do not pay any interest, making them appealing compared to alternative investments like bonds.
Rising industrial demand is also boosting silver demand. The white metal is used in a wide range of industrial applications. About half of the metal’s total demand comes from industrial applications, while 30% comes from jewelry/silverware/coins and medal manufacturers.
The booming solar power industry, increasing demand in areas like 5G, a rebound in global computer shipments, photovoltaics and automotive industries and new sources of demand for sensors used in IoT and OLED lighting will continue to boost silver demand. The metal is widely used for manufacturing solar panels and electric vehicles and will play a key role in the shift to 5G wireless network technology.
The silver market is heading for the fourth year of deficit, with this year’s shortage seen as the second biggest ever. Per the Silver Institute industry association, the global silver deficit is expected to rise 17% to 215.3 million troy ounces in 2024, driven by robust industrial demand.
The Silver Institute predicts global demand to reach 1.2 billion ounces this year, which would mark the second-highest level on record, given the continued strength in industrial end-uses and recovery in jewelry and silverware demand. The institute anticipates a 9% increase in demand for silverware and a 6% rise in jewelry demand this year. A projected recovery in consumer electronics will also provide a boost to the silver market.
Stocks to Buy
Avino Silver is engaged in the exploration and development of mineral properties. It primarily explores for silver along with gold, copper and lead. The stock saw a positive earnings estimate revision of a couple of cents for this year over the past 60 days.
Fortuna Silver is engaged in the exploration, mining and development of silver and base metal properties in Latin America. It saw a solid earnings estimate revision of 29 cents for this year over the past 30 days, with an expected growth rate of 68.2%.
Fortuna Silver has a Zacks Rank #2 (Buy) and a Momentum Score of A.
Hecla Mining is a leading low-cost U.S. silver producer, operating mines in Alaska and Idaho, and is a growing gold producer with an operating mine in Quebec, Canada. The stock saw a positive earnings estimate revision of a couple of cents for this year over the past 30 days and has an estimated earnings growth of 500%.
Hecla Mining has a Zacks Rank #1.
Buenaventura Mining is a leading mining company producing precious metals and holding mining rights in Peru. The stock saw a positive earnings estimate revision of 30 cents for this year over the past 60 days and has an estimated earnings growth rate of 809.1%.
Buenaventura Mining has a Zacks Rank #1 and a Momentum Score of B.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Industry Outlook Avino Silver & Gold Mines, Fortuna Silver, Hecla and Buenaventura
For Immediate Release
Chicago, IL – May 23, 2024 – Today, Zacks Equity Research discusses Avino Silver & Gold Mines Ltd. (ASM - Free Report) , Fortuna Silver Mines Inc. (FSM - Free Report) , Hecla Mining Co. (HL - Free Report) and Buenaventura Mining (BVN - Free Report) .
Industry: Silver Mining
Link: https://www.zacks.com/stock/news/2277343/4-top-ranked-silver-mining-stocks-likely-to-shine-further
Silver crossed the $30 per ounce mark for the first time in decades last week, driven by strong investment and industrial demand. Fresh bets on Fed rate cuts, sticky inflation, an estimated fourth annual deficit, rising geopolitical tension and uncertainties ahead of general elections in major economies added to the strength.
Notably, the white metal is one of the best-performing major commodities so far this year, having risen 32% and outperforming gold. The outperformance of silver can be attributed to its role as a precious metal and as an industrial metal.
Silver miners also spiked as these are the biggest beneficiaries of a surge in the metal’s prices. These act as a leveraged play on underlying metal prices and thus tend to experience more gains than their bullion cousins in a rising metal market. Some top-ranked silver miners like Avino Silver & Gold Mines Ltd., Fortuna Silver Mines Inc. , Hecla Mining Co. and Buenaventura Mining are poised to gain further as the solid trends are expected to continue for some time.
Strong Trends Are Here to Stay
Silver is often used as a means of preserving wealth during times of financial and political uncertainty, and usually does well when other asset classes struggle. Factors such as the forthcoming U.S. presidential election, the ongoing Russia-Ukraine war and the Israel-Hamas conflict enhance the metal’s attractiveness to investors.
The latest data on inflation has fueled hopes that the Fed could cut interest rates twice this year. A lower interest rate environment raises demand for silver as the precious metals do not pay any interest, making them appealing compared to alternative investments like bonds.
Rising industrial demand is also boosting silver demand. The white metal is used in a wide range of industrial applications. About half of the metal’s total demand comes from industrial applications, while 30% comes from jewelry/silverware/coins and medal manufacturers.
The booming solar power industry, increasing demand in areas like 5G, a rebound in global computer shipments, photovoltaics and automotive industries and new sources of demand for sensors used in IoT and OLED lighting will continue to boost silver demand. The metal is widely used for manufacturing solar panels and electric vehicles and will play a key role in the shift to 5G wireless network technology.
The silver market is heading for the fourth year of deficit, with this year’s shortage seen as the second biggest ever. Per the Silver Institute industry association, the global silver deficit is expected to rise 17% to 215.3 million troy ounces in 2024, driven by robust industrial demand.
The Silver Institute predicts global demand to reach 1.2 billion ounces this year, which would mark the second-highest level on record, given the continued strength in industrial end-uses and recovery in jewelry and silverware demand. The institute anticipates a 9% increase in demand for silverware and a 6% rise in jewelry demand this year. A projected recovery in consumer electronics will also provide a boost to the silver market.
Stocks to Buy
Avino Silver is engaged in the exploration and development of mineral properties. It primarily explores for silver along with gold, copper and lead. The stock saw a positive earnings estimate revision of a couple of cents for this year over the past 60 days.
With a market cap of $126.2 million, Avino Silver has a Zacks Rank #1 (Strong Buy) and a Momentum Score of B. You can seethe complete list of today’s Zacks #1 Rank stocks here.
Fortuna Silver is engaged in the exploration, mining and development of silver and base metal properties in Latin America. It saw a solid earnings estimate revision of 29 cents for this year over the past 30 days, with an expected growth rate of 68.2%.
Fortuna Silver has a Zacks Rank #2 (Buy) and a Momentum Score of A.
Hecla Mining is a leading low-cost U.S. silver producer, operating mines in Alaska and Idaho, and is a growing gold producer with an operating mine in Quebec, Canada. The stock saw a positive earnings estimate revision of a couple of cents for this year over the past 30 days and has an estimated earnings growth of 500%.
Hecla Mining has a Zacks Rank #1.
Buenaventura Mining is a leading mining company producing precious metals and holding mining rights in Peru. The stock saw a positive earnings estimate revision of 30 cents for this year over the past 60 days and has an estimated earnings growth rate of 809.1%.
Buenaventura Mining has a Zacks Rank #1 and a Momentum Score of B.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.