Polymetal, Fresnillo, Hochschild: Should you buy silver stocks now?

Highlights

The value of silver dipped by 11.6% in 2021, its prices have recently gone up amid the Russia-Ukraine crisis.

According to the Silver Institute, the worldwide demand for silver may hit a record high level this year, going up by 8% as compared to 2021.

Precious metals, like silver and gold, are considered safe-haven investments when the market volatility is high. After its value went down by 11.6% in 2021, silver has bounced back recently, mainly due to the Russia-Ukraine crisis as well the rising inflation. However, as the inflation levels go up, the interest rates are also rising, which is bearish for the precious metal as investors move towards assets that pay interest rather than keeping their money invested in metal holdings.

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According to the Silver Institute, the worldwide demand for silver may hit a record high level this year, going up by 8% as compared to 2021. Out of the total demand for silver, more than half is attributed to industrial use. This isn’t the case with gold, which is mainly treated as an investment asset. At times when inflation levels are high, both gold and silver are used as hedges against it. However, silver may act as a better hedge against inflation due to its larger industrial demand.

However, the economic changes may impact silver more than gold due to its heavy usage in the industrial and technological sectors. Even though silver is more volatile than gold, and it is a less effective portfolio diversifier than gold, it still has the advantage of being cheaper and more accessible to small investors.

Silver prices going up doesn’t necessarily indicate that all silver stocks will gain value. Thus, before investing in silver stocks, investors should carry out their own research and consider the market trends and prospects of the companies first. Here are 3 UK silvers stocks that investors may keep an eye on.

Should You Keep An Eye On Silver Stocks Now?

Polymetal International Plc (LON: POLY)

Anglo-Russian mining firm, Polymetal International Plc, has recently lost significant value amid sanctions being levied on Russia and it may drop out of the FTSE 100 index as the reshuffling takes place. Polymetal International Plc’s shares closed at GBX 140.10, down by 5.24%, on 17 March 2022. The current market cap of the company stands at £700.26 million as of 17 March 2022, and its one-year return is negative, standing at -90.32%.

Fresnillo plc (LON: FRES)

Mexico-headquartered metals miner, Fresnillo plc, recently declared a dividend of $0.24 on 8 March 2022. Fresnillo is the biggest producer of silver across the globe, and it is also the second biggest gold miner in Mexico. Fresnillo plc’s shares closed trading at GBX 730.80, up by 4.22%, on 17 March 2022. The current market cap of the FTSE100 company stands at £5,167.10 million as of 17 March 2022, and its one-year return is negative, standing at -39.43%.

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Hochschild Mining plc (LON: HOC)

London-headquartered silver and gold miner, Hochschild Mining plc, reported an increase of over 40% in its core earnings last month due to the rising silver prices and the revival in production after the pandemic. Hochschild Mining plc’s shares closed at GBX 128.30, up by 2.48%, on 17 March 2022. The current market cap of the FTSE250 company stands at £643.37 million as of 17 March 2022, and its one-year return is negative, standing at -26.42%.