The 3 Silver Stocks That Posted Insane Gains
The price of silver rose by about $1/ounce on Thursday to nearly $21/ounce as it appears that the bear market is coming to an end. Short sellers are nervous and even many long-term bulls are short-term bearish. This is an ideal situation for contrarians to buy, especially in the case of a secular bull market that has taken a few years off such as the silver market.
We also saw the shares of silver mining companies soar. The Global X Silver Miners ETF (NYSEARCA:SIL), which holds shares in companies that predominantly mine silver, rose over 6 percent. However, a few companies saw phenomenal gains as investors seem to be getting ready for the next leg up in this long term secular bull market. Rather than take profits in these names, investors should look at them closely and understand why they rose. They could be among the biggest winners in the next leg higher in silver, and you’ll want to use any weakness to accumulate them.
1. Golden Minerals (NYSEMKT:AUMN)
Golden Minerals was the big winner of the day, with shares skyrocketing 45 percent and doubling over the past two days. Investors should keep in mind that this has also been one of the worst performing silver miners over the past couple of years. The company’s shares plummeted twice in 2013. The first time came after management released an updated resource estimate for its Velardena project, which showed that the resource size is actually about 2/3 smaller than initially thought. The second plunge came when the company suspended mining operations at Velardena as metal prices were too low. However, yesterday the company announced that it would be restarting the mine and that sent shares soaring. The rise in the silver price Thursday only adds fuel to the fire. Before avoiding the stock simply because it has doubled over the past two days, keep in mind that it was down over 95 percent from its peak and that while we may see a consolidation, if the bull market in silver is back then Golden Minerals can rise substantially.