CALGARY — Shares in Canadian silver mining companies are posting double-digit increases as the price of the shiny white metal surges to multi-year highs driven by retail investors.
In morning trading on the Toronto Stock Exchange, First Majestic Silver Corp. was up as much as 33.3 per cent, Silvercorp Metals Inc. by 32.5 per cent, Fortuna Silver Mines Inc. 27.58 per cent and Pan American Silver Corp. up about 11 per cent.
Silver rose above US$30 per ounce on Monday morning, the highest level since 2013.
In a report, analysts with RBC Capital Markets attributed the sudden interest in silver to an online push on Reddit discussion boards similar to last week’s GameStop phenomenon.
It pointed out that silver prices have increased with no “normal” reason to justify the action.
Colin Cieszynski, chief market strategist for SIA Wealth Management, says the jump in silver’s fortunes follows intense interest over the weekend in the media and on Reddit on whether it will become the next active market in the wake of GameStop’s big move last week.
“The potential for a sharp move to cause tumult in various markets including options markets should not be discounted, similar to some of the knock-on effects from GameStop,” said RBC in its report.
“World precious metals markets have developed over millennia which makes this market more robust in our view than a small cap company with deteriorating prospects. (The) gold/silver ratio gives room for silver to run.”
This report by The Canadian Press was first published Feb.1 2021.