Gold and silver prices edged lower after a breakout on Wednesday. The US dollar continues to move lower, which provided some support for the yellow metal. However, U.S. Treasury yields declined following a softer than expected U.S. PPI figure. The wholesale price inflation numbers follow stronger than expected consumer price index data this week.
Gold has struggled to break and retain above the $1,800 level the past half-year or so and could continue to do so for a bit longer. At some point that will change, but not until we get some freedom of movement from familiar resistance levels.
Silver markets also went back and forth during the same time perod as the market continues to hang about the 50 day EMA. Analysts expect that there will continue to be noisy behavior, but at the end of the day it is going to come down to one thing: the US dollar.
Both $1,800 and the $23.50 level offer significant resistance for gold prices and silver prices, respectively. Therefore, these are worth paying close attention to. If the precious metals can break above that level, then it is likely that the gold and silver markets will bring in the market towards the 200 day EMA above.
Due to its wide application in industrial and manufacturing processes, analysts have predicted that silver might outperform gold once bearish sentiments subside and the anticipated bull market of 2022 starts.
Given this setting, the mining stocks of Fortuna Silver Mines Inc. and Silvercorp Metals Inc are favored by Wall Street analysts. Expectations for the two silver stocks are that they may rally by more than 60% in price. Hence, we think these stocks might be solid additions to one’s watchlist.
Fortuna Silver Mines Inc is a Canadian miner that explores, extracts, and processes precious and base metal deposits in Latin America. Its principal properties include the Caylloma silver, lead, and zinc mine in Southern Peru and the San Jose gold and silver mine in Southern Mexico. For its fiscal third quarter, ended September 30, FSM’s sales increased 95% year-over-year to $162.60 million. Its adjusted net income improved 39.8% to $22.50 million, while its adjusted EBITDA rose 78.4% from the same period prior year to $75.30 million.
As a result, the mining stock of Fortuna Silver Mines Inc gained 18.2% in price over the past month and 7.9% over the past five days.
Silvercorp Metals is another Canadian miner that engages in acquiring, exploring, and developing mineral properties in China and Mexico. The company operates primarily mining silver, gold, lead, and zinc. The latest results from its program in its HPG mine show additional high-grade intercepts. The company announced that it has nine rigs drilling the mine currently.
SVM's stock has gained 4% in price over the past month. It closed yesterday’s trading session at $3.68. It has gained 8% over the past five days.