Silver stocks such as Great Panther Silver (NYSE:
GPL), Mines Management Inc (NYSE:
MGN), and Avino Silver & Gold Mines (NYSE:
ASM) have been buzzing lately with volume increases. Incidentally, this has
got a connection with gold.
Silver is nowhere a standard when it comes to risk averse
investing. Unlike gold, the metal largely gets consumed in industrial and
retail operations and has limited applications in national economics or currency
balancing. While gold scores higher during times of economic uncertainties as a
safe haven investment, silver has its advantages when the prices of gold go
through the roof. It is not difficult to see why investors tend to shift focus
from gold to silver once economic circumstances become buoyant. For one, silver’s industrial demand is
triggered with higher economic activity leading to price spurts. At the same
time, silver’s retail demand gets a boost because of high gold valuations. For
these reasons, price movements in silver are often more pronounced than in
All these factors allude that a smart rally may be brewing
in silver stocks such as Mines Management Inc (NYSE:
MGN), which largely remained stable in the current month but saw some
delivery based buying on Thursday and Friday. Earlier this month, the company announced
having signed a letter of intent with Estrella Gold Corp to acquire up to 75
per cent stake in the La Estrella gold and silver project in central Peru. The
region has a history of exploration successes in previous projects. Currently
trading at $2.19, the stock has a 52 week range of $ 1.35 - $ 4.19.
Great Panther Silver (NYSE:
GPL) gave a clear breakout in January crossing its trend line resistance
decisively. Having stayed above the 20 and 50 days moving averages, the stock
is fast approaching its 200 day moving average where it could face some stiff
resistance. Buying in the stock further strengthened after the company reported
encouraging production for the fourth quarter earlier this month.
Shares of Avino Silver & Gold Mines (NYSE:
ASM) have moved up 28 per cent in the last month as the company announced
having drilled 996 gram/ton at the San Gonzalo zone in its Durango property.
Although a small player, Avino is a debt free company and is well-funded to
continue its development plans.