Here is the gist of the article:
ASX silver stocks are stirring after suffering a bleak end to 2024. All of the leading names have been popping higher thanks to rising prices for the metal.
Silver’s move to $US32.25/oz mid-week is not the record breaking stuff of its more glamorous precious metals accomplice gold.
But at least the move higher is undoing the share price hit the ASX silver stocks took in the closing months of 2024, when silver fell from the 12-year highs in October of $US35/oz to below $US30/oz.
That price retreat triggered a broad sell-off in ASX silver stocks, with share price falls of 25-50% common before buying support for the sector took hold during the week.
While the gold price also took a hit in late October on interest rate concerns, it bounced back quicker and has since marched to record levels, taking ASX gold stocks along for the ride.
The silver price is well short of its all-time high of $US50/oz back in 1980 ($US180/oz inflation adjusted) when the Hunt brothers from Texas tried to corner the market. But it doesn’t need to be at record levels to fire up interest in ASX silver stocks.As mentioned earlier, the silver stocks are still sporting 25-50% losses on their October 2024 levels when silver was near on $US35/oz. And here we are, with the metal giving every in indication it will retake $US35/oz soon.
There is a bit of wildcat emerging in silver too.
Mexico is the world’s biggest producer and supplies about 80% of US demand. Donald Trump has put a one month stay on his plan to subject Mexico imports to a 25% tariff.
Negotiations are underway and the assumption is that 25% tariff will become a less onerous 10% tariff. Still, a US silver premium ahead of the Mexico tariff taking effect is on the cards.And like gold, silver’s safe haven monetary qualities are becoming more appealing as the tit-for-tat trade war between the US and its foes and allies alike escalates.
All that has got Garimpeiro thinking that it could be time for a return to the ASX silver sector. Others are thinking the same given the sharp share price increases – from battered levels – seen in the silver stocks this week.
Assuming silver retakes $US35/oz soon, there is every reason to suspect the silver stocks will retake their October 2024 levels, remembering they are currently 25-50% below those levels.
There is word of caution. Because of silver’s greater use in industrial applications compared with gold, its upwards momentum could be derailed by a slowdown in economic growth caused by tariff increases under the Trump administration.
Having said that,
silver’s growing use in solar panels and electric vehicles means that for the fifth consecutive year, a supply deficit in the silver market is expected (150 million ounces according to an assessment by the Silver Institute/Metals Focus).
I think that the Ag price in the lull period before the coming upward storm. Trump's bat shit crazy imposition of tariffs on Mexico will probably unleash the price storm propelling Ag over $35 soon.
Looking at the ARD sp, a close above the 23.6% (0.028) Fib retrace will soon see the 38.2% Fib ratio (0.04) hit, confirming a Stage 2 Weinstein
breakout. ARD's RSI atm is neutral so plenty of upside in the sp.
IMHO, ARD is very much undervalued.
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