Hycroft Mining (NASDAQ:HYMC) stock is up a staggering 230% today as gold and silver prices hit multi-year highs amid Russia’s ongoing invasion of Ukraine.
Hycroft Mining is a tiny mining company with a market capitalization under $100 million and operations in Nevada. HYMC shares trade at the depths of the penny stock tables and closed trading in New York yesterday at just 33 cents.
Yet the company’s stock is now catching fire as investors around the world pile into gold and silver as safe havens amid market volatility and geopolitical instability caused by Russia’s invasion of neighboring Ukraine.
What Happened With HYMC Stock
Right now, the stock market is bracing for continued volatility. In fact, just yesterday, the Nasdaq entered bear-market territory. This has sent nervous investors to find refuge in gold, which is largely considered a safe-haven asset. Spot gold prices hit $2,002.40 yesterday, their highest level since August 2020. Silver prices rose more than 2% to $26.30 yesterday as the Dow Jones Industrial Average fell more than 3%.
And gold and silver are not the only metals rising sharply. Elsewhere in the market, palladium prices jumped 15% to an all-time high of $3,440 an ounce. Why? Russia accounts for 40% of global palladium production. For automakers who use the metal in catalytic converters, this has sparked fears of a palladium shortage. The price of nickel also surged yesterday as global supply chains tried to price in the possible absence of supplies from Russia, the world’s third-largest nickel producer.
Copper and aluminum prices are also sitting at record levels.
Why It Matters
With prices for gold, silver and other metals riding high, mining companies large and small are attracting investor capital. Today’s 200%-plus rise in HYMC stock illustrates how quickly investors are stampeding into shares of mining companies, even small producers such as Hycroft Mining. The inflows are likely to continue over the near term as analysts forecast prices for precious and industrial metals will continue to run hot until there is a resolution to the Russian attacks on Ukraine.
Today’s big move higher is good news for HYMC stock and its shareholders. Over the past year, its share price has declined 94%, including a 47% retreat so far in 2022. As a penny stock, Hycroft Mining’s shares typically experience low trading volumes and get little attention from the financial press. The company owns and operates the Hycroft Mine in Nevada that focuses almost exclusively on extracting gold and silver from the ground.
What’s Next for Hycroft Mining
HYMC stock gets a big lift today along with shares of other mining companies. How long it lasts remains to be seen. If investors continue to push the price of gold, silver and other metals higher in coming days and weeks, than Hycroft Mining’s stock could continue to benefit. Over the long term, the share price should be expected to normalize as prices move lower and stabilize once again.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Joel Baglole 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.