Today, silver stocks are appreciating rapidly, as investors flock to precious metals. Market-related concerns have driven the valuations of various producers higher, as investors seek safe haven assets. A flattening yield curve and a rotation out of stocks into defensive assets is driving much of this price action today.
Among the best-performing silver stocks today are First Majestic (NYSE:AG), Fortuna Silver Mines (NYSE:FSM), Hecla Mining (NYSE:HL) and Pan American Silver (NYSE:PAAS). These top silver producers are all up between 8% and 12% at the time of writing.
Technical analysts point to a move above a key resistance level today as an indication that silver prices could be in a bullish trend. Of course, fundamental forces are also at play with silver’s rise.
Let’s dive into what’s driving silver higher today.
Silver Stocks Surge On Continued Economic Concerns
As investors flee for safety, silver stocks have become a priority safe haven today. The price of this precious metal has appreciated to highs not seen in more than two months. Accordingly, investors looking for leveraged exposure to the price of silver have sought out miners.
The aforementioned group of silver miners provide investors with impressive upside in a rising commodity price environment. Essentially, these miners are all characterized by high fixed costs. Revenue, on the other hand, is variable. Accordingly, as the price of silver rises, these companies get a boost to their bottom line in a big way. Thus, those looking to play surging silver prices from a leveraged standpoint may choose any of the above names.
That said, silver is much more of an industrial metal than its precious metal counterparts, such as gold. Silver is used in a number of industrial processes and is therefore tied to economic performance. However, it’s also a hedge, and that’s the key investment thesis investors are focusing on today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
