Silver Mining Stocks Beating Gold Top Guns – Adriatic PLC, Aeon Metals, and Silver Mines Turn Multibaggers

Summary

  • Silver spot prices have appreciated over 139 per cent in the recent few months catching up lost grounds as compared to gold’s performance in this year.
  • Considerable volatility in risky assets has fuelled the demand for safe-haven assets such as gold and silver, igniting an impeccable rally in both the precious metals.
  • Moreover, the COVID-19 outbreak has moulded the silver supply, demand, and prices dynamics, leading to a positive price momentum.
  • ASX-listed gold or silver mining companies have emerged as beneficiaries of the bull run in the bullion market.
  • Some of the ASX-listed silver stocks are now even outperforming the total returns of blue-chip gold stocks to emerge as the top-performing stocks.

The silver spot price is now the talk of the town with prices rallying 139.40 per cent from USD 11.640 per ounce (intraday low on 18 March 2020) to the recent high of USD 27.867 per ounce (as on 6 August 2020 6:43 PM AEST).

The silver spot is now demonstrating its correlation with gold while simultaneously reflecting its own safe haven attributes as the COVID-19 outbreak has disrupted the demand and supply scenario for the silver industry.

  • The year 2020 started on a dubious note and presented many challenges across the globe on the economic front, leading to a disruption in the consumption and production scenario across the international front, creating considerable volatility in risky assets
  • For example, 20 April 2020, a black day for West Texas Intermediate (or WTI) crude, when the futures contract traded in the negative zone, marking as a historic event for many years to come.
  • Such considerable volatility in risky assets has fuelled the demand for safe-haven assets such as gold and silver, igniting an impeccable rally in both the precious metals.

To Know More, Do Read: Gold- A Sprinter in the Marathon, Is the Price Rally Sustainable?

Both silver and gold are in a strong bull rally, however, silver has emerged as one of the top-performing assets, even outperforming gold, even now on a YTD basis, the returns from silver have surpassed the returns of gold.

To Know More, Do Read: Silver Catches up With Gold and How!

  • In the pre-crisis times, or prior to the onset of the year 2020, silver had remained relatively dormant with weak prices and a seldom spike or a phase of large consolidation, leading to a less relative interest in the commodity as compared to others members of the bullion family, including platinum and palladium.
  • However, the COVID-19 outbreak has moulded the silver supply, demand, and prices dynamics, leading to a positive price momentum.

Many silver-related forecasts are now unfolding, and silver now seems to be like an uncaged bull, running wild, leading to sky-high prices.

To Know More, Do Read: Silver to Reach USD 19.0 Per Ounce by Year-End- Says The Silver Institute

The prime reason behind the silver rally is the large purchase by ETFs and other large institutions, leading to a surge in the net physical investment demand. Momentum in gold price also has had an rub off effect on silver and large public participation in the wake of FOMO buying.

  • The gold spot market boomed expectedly and in short time, leaving many investors and speculators empty-handed, leading to a FOMO buying in silver, as silver rooted itself to follow its forerunner – gold.

To Know More, Do Read: Silver Outperforms Gold with Over 30% Return; Money Managers Betting on Silver!!

Irrespective of reasons behind the silver rally which are plenty, ranging from large institutional purchases, to supply lag caused by the disruptions in mining operations led by the restrictions imposed across various nations to contain the COVID-19 spread, ASX-listed gold or silver mining companies have emerged as beneficiaries of the bull run in the bullion markets.

To Know More, Do Read: Gold Stocks Attempting Volatility Breakout – NST, SAR, GOR, and RRL

Just like many ASX-listed gold stocks have even outperformed gold in terms of total returns, ASX-listed silver stocks are not lagging behind with the total returns delivered by some stocks outperforming the returns from silver and even that of ASX-listed gold stocks.

Total Returns Include Dividend Distribution (Data Source: Refinitiv Eikon Thomson Reuters)

Total Returns Include Dividend Distribution (Data Source: Refinitiv Eikon Thomson Reuters)

ASX-listed Silver Stocks Under Sentiment Splash

  • Adriatic Metals Plc (ASX:ADT)

The stock of the Company surged from the level of $0.780 (intraday low on 17 March 2020) to the present high of $2.450 (as on 6 August 2020) to mark a price gain of ~ 214 per cent.

ADT has been in a consistent rally with the surge in silver prices, delivering a YTD return of ~ 41 per cent (as per closing on 6 August 2020).

The surge in silver prices has supported a strong rally with prices surging from the level of $0.054 (intraday low on 15 April 2020) to the recent high of $0.225 (as on 28 July 2020) to mark a price appreciation of ~ 316.67 per cent.

However, the stock has demonstrated considerable volatility in the price with AML plunging from its recent high of $0.225 to the present level of $0.150 (as on 7 August 2020).

AML has delivered a YTD return of -3.33 per cent (as per the closing on 6 August 2020).

Despite a large price appreciation, the low YTD return is mainly due to the recent correction of ~ 35.56 per cent in the stock.

  • Argent Minerals Limited (ASX:ARD)

ARD has been in a consistent rally from the level of $0.009 (intraday low on 23 April 2020) to the present high of $0.064 (intraday high on 28 July 2020) to deliver a price gain of ~ 611.12 per cent.

Apart from a significant price appreciation, the stock has delivered some strong returns on a YTD basis with the return of 247.06 per cent (as per the closing on 5 August 2020).

In a nutshell, While a rally in both silver and gold, is witnessed in the market, silver has emerged as one of the top-performing assets, even outperforming gold, even now on a YTD basis, the returns from silver have surpassed the returns of gold.

The higher return from silver, and in tandem, a large price rally, is further translating into higher stock prices of ASX-listed silver mining companies on the exchange.

Also Read: Gold Player That Has Beaten Guidance Over Many Years! Strong Tailwinds An Icing on the Cake

Just like many of the ASX-listed gold stocks are emerging as the industry outperformers, the silver mining stocks are not lagging behind with the total returns of silver mining stocks even surpassing YTD returns of blue-chip gold stocks.

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