Shares in various Canadian silver mining firms recorded double-digit surges as the price of the metal increased to eight-year highs. Some credit the increment to promotional discussions on social media sites such as Reddit.
CEOs of mining firms stated that they didn’t expect the high to last long, noting that they were OK with that, as prices for the shiny white metal had been rising for over a year because of limited new supply and an increase in demand.
Endeavour Silver Corp. CEO Brad Cooke said that it was nice to witness this short rally, explaining that squeezing shorts was not actually an investment strategy. The company, which is based in Vancouver, saw its shares rise by about 21% on Monday.
Pan American Silver Corp. CEO Michael Steinmann commented that silver mining firms were used to commodity price volatility over the years, as the silver market was much smaller than that of gold. The firm, which is also based in Vancouver, had its shares increase by over 13%.
Steinmann added that many expected that the coronavirus pandemic dwindling would bring about an increase in the industrial demand for the metal, as it is used not only in electronic communications but also in electric cars and solar panels. He went on to explain how investment demand from people concerned about globally loose monetary policies and pressure on the metal’s industrial demand was good for the metal’s market.
In the meantime, the demand for silver both as a hedge against inflation and precious metal is also growing.
By Monday morning the price of silver had risen to more than $30/ounce, its highest since the year 2013. By the day’s end, the March contract rose 9.3% and settled at $29.42/ounce. On the Toronto Stock Exchange, Fortuna Silver Mines Inc. stocks were up 18.7%, Silvercorp Metals Inc. closed up 25.7% and First Majestic Silver Corp. closed 23.5% higher.
Last week, traders on Reddit worked together to buy thousands of shares of AMC, GameStop and other chains struggling to stay afloat. The company’s shares had been heavily shorted by various hedge funds, which led to heavy damages being incurred by the said entities.
However, the rush into silver stocks caused uncertainty, with some retail traders on Reddit dubbing the increase in commodity prices a trap, with others accusing the hedge funds that incurred losses last week of anonymously joining the social media platform to rout them out of GameStop futures and into silver.
Meanwhile, as different governments spend massive amounts of money on stimulus packages aimed at reviving economic activity at this time of the pandemic, gold has become more attractive as a store of value to guard against the expected inflationary pressure on currencies. Consequently, companies such as GoldHaven Resources Corp. (CSE: GOH) (OTCQB: GHVNF) are set to reap big as gold prices reach an all-time high.
NOTE TO INVESTORS: The latest news and updates relating to GoldHaven Resources Corp. (CSE: GOH) (OTCQB: GHVNF) are available in the company’s newsroom at http://ibn.fm/GHVNF
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