The price of silver has hit a 14-year high as metals ranging from gold to copper continue to boom across international markets.
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The spot price of silver is up nearly 2% on July 14 and trading close to $40 an ounce, following a 4% rally over the past week. Silver’s price has now risen 35% this year, including a 6% gain in the last month alone. That surpasses gold’s 28% year-to-date gain.
The sharp price increase has given a lift to the stocks of leading silver miners and producers such as Hecla Mining (HL), Pan American Silver (PAAS), and First Majestic Silver (AG). Commodities analysts say silver is benefitting as investors seek alternatives to gold with the yellow metal’s price near an all-time high of just over $3,500 per ounce.
Trade Tensions
The rise in demand for silver has put the market under strain as most silver is held by exchange-traded funds (ETFs) and isn’t easily available to lend or buy. Since February, the volume of silver-backed ETFs has expanded by 2,570 tons, according to market data. Concerns about U.S. trade policy have also helped to push silver’s price higher, say analysts.
Mexico, the world’s biggest producer of silver and a key supplier to the U.S. market, has been hit with a 30% tariff threat by U.S. President Donald Trump. The U.S.-Mexico-Canada Agreement on trade excludes silver from the levies. But some analysts are concerned about the possibility that exemptions could be threatened.
Lastly, analysts say that silver benefits from being both a precious and industrial metal. In addition to jewelry, silver is used in items such as solar panels and some computers.
Is HL Stock a Buy?
The stock of Hecla Mining has a consensus Moderate Buy rating among seven Wall Street analysts. That rating is based on two Buy and five Hold recommendations issued in the last three months. The average HL price target of $7.07 implies 12.04% upside from current levels.
