Business & Investment

Why gold and silver stocks soared on Wednesday

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What’s wrong?

Stocks of most gold and silver mining companies soared on the meantime First Majestic Silver (TSX: FR)(NYSE: AG) Company-specific, Positive triggerMost other top gain stocks like, New Pacific Metals, Silver crest metal, When Endeavor Silver, Today too, each is skyrocketing by at least 10%. By comparison, Canada’s major market indexes were on a mixed note with a rise of only 0.2% that day.

so what?

2021 ended with a bullish note for equity investors. TSX composite Benchmarks have recorded the best years in over 10 years. However, it seems that 2022 began in a different way, as concerns over high inflation across North America began to hurt investors’ sentiment. While the Federal Reserve has already shown some rate hikes in the short term, investors are now expecting even tougher monetary policy as long-term bond yields continue to rise.In particular, yields on 10-year US and Canadian government bonds gain Yesterday was the highest price in several years.

These factors have led to significant increases in precious metal prices over the past few sessions. For example, gold prices were trading at a daytime rise of almost 1.5% this afternoon, while silver prices soared by more than 5% from Monday.

Rising precious metal prices could help companies such as First Majestic, New Pacific, Silvercrest Metals and Endeavor Mining increase their profitability in the short term. These expectations are driving the surge in these gold and silver stocks today.

So what?

Interestingly, most of the US stocks mentioned in this article were trading in the negative territory on a year-to-date basis until yesterday. After today’s sharp rise, First Majestic’s share price rose 6% in 2022. Similarly, New Pacific Metals, Silvercrest Metals, and Endeavor Mining are each trading at an increase of 7-8% each year.

While daytime rises in precious metal prices are pushing up these gold and silver inventories today, there is no guarantee that fundamentally weak inventories will be able to sustain these rises over the long term. That said, First Majestic shares may be worth the bet right now, as they released record production results for the fourth quarter yesterday, along with solid production guidance for 2022. These factors can help keep their inventories soaring in the short term.

Why gold and silver stocks soared on Wednesday Why gold and silver stocks soared on Wednesday

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