Silver on Track to Outperform Gold in 2020 Driving Silver Stocks Up

By Staff Writer / October 01, 2020 / Article Link

Tuesday’s session on the Toronto Stock Exchange saw gold prices reclaim the psychologically important $1,900 an ounce mark, booking their highest settlement in a week. This reaffirmed the sentiment among gold stocks enthusiasts and some commodity experts that gold remains a strong investment in the long term.

While almost all TSX gold stocks have had a huge year up until this point, Canadian junior gold miners still have an enormous runway for growth. One of the stocks with the most upside, is that of B2Gold (TSX:BTO)(NYSE:BTG). B2Gold has established itself as a reliable long-term growth business. So far this year, since the bottom in March, B2Gold shares have gained 120% vs. gold, which is up about 30%. However, it’s lagged recently due to heightened political risks in Mali, the site of its Fekola mine. Since operations at the mine haven’t been affected yet, it’s not having too much of an impact.

In the same trading session, silver settled above the resistance at $23.30 and continued its rebound as the U.S. dollar declined against a broad basket of currencies. Persistent concerns about the global economy and monetary policies implemented to combat the COVID-19 pandemic are giving more upside momentum to silvers stocks as well.

The largest percentage gainers on the TSX were MAG Silver Corp, which jumped 5.7% and OceanaGold Corp, which rose 3.7%.

The gold-focused ETF, the SPDR Gold Trust ETF GLD was up by more than 1.9% so far this week and nearly 25% so far this year, while the iShares Silver Trust SLV, +2.18% has advanced 36% in the year to date.

Commodity experts were quick to point out that silver has more industrial applications than gold. In fact, industrial applications account for 60% of the global silver consumption. Despite the pandemic putting a dent in the demand for the metal due to the disruptions that the industrial sector saw, So far this year, the Mining - Silver industry has rallied 8.2%, outperforming the S&P 500’s growth of 2.4% so far this year.

Consecutively, several silver mining companies in Canada have seen their silver stocks rally as a result. The Vancouver, Canada-based Pan American Silver PAAS is the world's second largest primary silver producer with the largest silver reserve base globally. It owns and operates silver and gold mines located in Mexico, Peru, Canada, Argentina and Bolivia. The Zacks Consensus Estimate for the company’s current-year earnings indicates year-over-year growth of 12.8% and puts it at a Strong Buy. The stock has a trailing four-quarter earnings surprise of 66%, on average making it one of the best silver stocks to invest in. The company’s shares have gained 36% so far this year, compared with the industry’s growth of 10%.

Other Canadian mining companies of interest include Active mining companies in the markets this week include:  MAG Silver Corp. (NYSE:MAG) (TSX:MAG), Aftermath Silver Ltd. (OTCQB:AAGFF) (TSXV:AAG), Endeavour Silver Corp. (NYSE:EKX) (TSX:EDR), Fortuna Silver Mines, Inc. (NYSE:FSM) (TSX:FVI), Hecla Mining Company (NYSE:HL).