Who is the world’s largest silver producer?

For years, the title of the ‘World’s Largest Silver Producer’ has been dominated by two companies: Fresnillo PLC (LON:FRES) and BHP Billiton Ltd. (NYSE:BHP). That changed in 2011.

For years, the title of the “World’s Largest Silver Producer” has been dominated by two companies: Fresnillo PLC (LON:FRES) and BHP Billiton Ltd. (NYSE:BHP). Fresnillo is named after it’s mammoth Fresnillo silver mine in Mexico while BHP operates the Cannington mine in Australia.

Both the Fresnillo and Cannington mines are “primary silver mines,” which means that silver is the predominant metal that’s being mined at the sites. For years, those two mines have helped BHP and Fresnillo take the title as the world’s largest silver producers.

In 2011, though, that crown went to the Polish mining company KGHM Polska Miedz (PINK:KGHPF). What’s interesting about that is the fact that the KGHM doesn’t even have a primary silver mine. It captured the title of the world’s largest silver producer by mining silver as a byproduct of other metals.

The world’s Top 3 silver producers in 2011

1) KGHM Polska Miedz (PINK:KGHPF). 40.5 million ounces of silver.

2) BHP Billiton Ltd. (NYSE:BHP). 38.9 million ounces of silver.

3) Fresnillo PLC (LON:FRES). 37.9 million ounces of silver.

What lead to the changing of the guard? Silver production at the Fresnillo and Cannington is on the decline as the quality of ore coming out of both sites has dropped. Check out last year’s numbers to see the difference.

The world’s Top 3 silver producers in 2010

1) BHP Billiton Ltd. (NYSE:BHP). 46.6 million ounces of silver.

2) Fresnillo PLC (LON:FRES). 38.6 million ounces of silver.

3) KGHM Polska Miedz (PINK:KGHPF). 37.3 million ounces of silver.

[Source: The Market Oracle]

Of course, we can’t read much into these numbers when we’re looking for potential investment opportunities. To do that, I recommend searching for junior mining companies that make good buyout candidates (companies that might get acquired by a BHP or Fresnillo, for instance). Check out some of our recent posts on silver mining stocks for more:

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How to identify silver mining takeover targets in 2012

The only reliable way to predict what sorts of junior silver mining stocks will get acquired is by looking at the types of companies that have gotten acquired in the past.

At one point or another, everyone who invests in the junior mining sector thinks about the big buyout their company could get. You’re more likely to pick a dud than a winner, though, and that means it’s all the more important to do your due diligence before plowing into a mining stock.

The only reliable way to predict what sorts of junior silver mining stocks will get acquired is by looking at the types of companies that have gotten acquired in the past. And contrary to a common investor belief, it’s producers (companies that are already pulling silver out of the ground) – not the hotshot young explorers that have uncovered a giant deposit – that tend get acquired.

“As silver miners continue to amass healthly cash treasuries, the sector looks primed for a spate of merger and acquisition activity,” Haywood Securities wrote in a recent research report on silver mining stocks (per Mineweb). “Producer/producer-sector consolidation seems – at the moment – to be a preferred route for silver producers to add to their production growth profiles. For example, Pan American’s recent acquisition of Minefinders, First Majestic’s proposed acquisition of junior producer Silvermex Resources, and Endeavour Silver’s proposed acquisition of AuRico Gold’s El Cubo operating silver-gold mine.”

Haywood’s report almost reads like a manual for identifying mining takeover targets. Look for small and medium-sized producers that control large deposits. Why, after all, would a large mining company take a chance on acquiring a potential deposit when they can go after one that’s going to start generating income from day one?

Knowing what the majors are looking for makes our job easier. Haywood even went on the record with a list of their favorite producers in their report. Among them? Endeavour Silver (NYSE:EXK), Fortuna Silver Mines (NYSE:FSM) and Mandalay Resources (PINK:MNDJF).

A few we’ve identified? Scorpio Mining Corp. (PINK:SMNPF), Golden Minerals Company (AMEX:AUMN) and Great Panther Silver Ltd. (AMEX:GPL). We’ve identified several other silver producers in our new book, The Top 500 Gold and Silver Mining Stocks.

Like this post? On Saturday, we also wrote about Haywood Securities’ fascinating silver price forecasts through 2016.

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The biggest silver mining stock you’ve never heard of: Revett Minerals Inc. (RVM)

If Revett can satisfy all the environmental concerns at Rock Creek, the stock will surge higher. It’s just a question of when that will happen and how high Revett will rise.

Most gold and silver mining stocks on the major exchanges are well-known among investors. Hecla Mining (HL), Agnico-Eagle (AEM) and Silver Standard (SSRI) are practically household names as are most of the gold and silver mining stocks with a market cap north of $100 million.

There is one AMEX stock that seems to be flying under the radar, though: Revett Minerals Inc. (RVM). Based on the company’s market cap of $126 million, it’s hard to believe they’re sitting on what could be the largest silver mine in the U.S., and one of the top 10 largest silver mines in the world.

The company’s Rock Creek Project in Montana contains an estimated 300 million ounces of silver and 2.5 billion pounds of copper. And, as the company works to get that world-class mine online, they’re already generating steady cashflow from their nearby Troy Mine.

“They have $28 million in the bank, and will generate roughly $30 million in cash flow (from the Troy Mine) every year (assuming silver and copper stay in the range),” writes Jay Arnold at SeekingAlpha. That influx of cash has Revett’s shares currently trading a low P/E of just 12.10.

“In my opinion, RVM’s current price reflects zero value for their giant silver/copper deposit Rock Creek,” Arnold writes. Shares are just trading on the strength of the Troy Mine (which could be operational for the next 20 years).

All this would be illogical, but there is a hurdle. Revett’s Rock Creek project has yet to be fully permitted, even after 10 years of work. If the permits finally go through, Arnold believes the stock could see a “ten-fold increase.”

“We are working to complete a Supplemental EIS (Environmental Impact Study) on the Rock Creek Project to address some NEPA-related issues as directed by the Federal District Court in May 2010,” Revett wrote when it announced its 2011 earnings results on March 27, 2012. “On November 16, 2011, we received a critical decision from the Ninth Circuit Court of Appeals affirming the prior District Court’s favorable ruling regarding challenges brought under the Endangered Species Act (ESA).”

If Revett can satisfy all the environmental concerns at Rock Creek, the stock will surge higher. It’s just a question of when that will happen and how high Revett will rise.

Like this post? Check out our new book The Top 500 Gold and Silver Mining Stocks.

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Undervalued silver stocks: Tahoe Resources Inc. (THO, THOEF)

The sheer size of Tahoe’s Escobal deposit puts near the top of our list of the Top 200 gold and silver mining companies as ranked by gold and silver in the ground.

Tahoe Resources Inc. (PINK:THOEF, TSX:THO) is one of our top 100 favorite gold and silver mining stocks out of the 500 that we’ve profiled in our brand new book: The Top 500 Gold and Silver Mining Stocks. Here are four reasons why:

1) More than 300 million ounces in the ground. Tahoe Resources is focused on its Escobal silver project in Southeast Guatemala. Escobal hosts an indicated silver resource of 245.2 million ounces at 500 g/t average grade, and an inferred silver resource of 71.7 million ounces at 271 g/t average grade. The sheer size of the deposit puts Tahoe near the top of our list of the Top 200 gold and silver mining companies as ranked by gold and silver in the ground (check out our book for the full list).

2) Extremely low cash costs. According to Chris Marchese, contributor to The Morgan Report, Tahoe is looking at expanding its mill capacity so that it can produce between 26–28 million ounces of silver at a cost of $3–4 an ounce net of all the byproducts.

Another stock that we like – Great Panther Silver Ltd. (AMEX:GPL) – has generated lots of investor interest even with cash costs between $6.50 and $7.50 an ounce. All in all, Marchese is very bullish on Tahoe. “The only problem is it’s in Guatemala,” he says.

3) Production slated for Q1 2014. “The original capital estimate of $326.6 million (for the Escobal project) is on-budget, the project is fully financed, and we hold a significant cash reserve should we encounter unanticipated start-up issues,” Kevin McArthur, Tahoe’s President and CEO, said in the company’s earnings release last month. “We have seen impressive exploration results over the last year, indicating the potential for future mine expansion. … It is anticipated that the expansion plan would be financed with internal cash flow and completed within five years of mine start-up.”

All told, Tahoe’s current mine plan calls for 317 million silver ounces to be mined over 18 years. Look for the total number of ounces to expand after the company has positive cash flow.

4) Investor interest. Despite headwinds for gold and silver mining stocks, Tahoe’s shares are actually up for the year in 2012 (+3.22 percent at the time of this writing). Comparatively, the Global X Silver Miners ETF (NYSE:SIL) is flat since the start of the year and the Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) is down more than 9 percent. Since debuting on the Toronto Stock Exchange in June of 2010, Tahoe shares have climbed more than 170 percent. American investors can buy shares in Tahoe on the Pinksheets under ticker THOEF.

Like this post? Check out our book, The Top 500 Gold and Silver Mining Stocks, to uncover other undervalued gold and silver mining stocks.

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Undervalued silver stocks: Alexco Resource Corp. (AXU)

Alexco has already grown production by 30 percent in 2012, and we believe they’re just getting started.

Alexco Resource Corp. (AMEX:AXU) is one of our top 100 favorite gold and silver mining stocks out of the 500 that we profiled in our new book: The Top 500 Gold and Silver Mining Stocks. Here are three reasons why:

1) A truly world-class deposit. It’s hard to argue with quality of Alexco’s Bellekeno deposit in the Yukon Territories. Some veins grade more than 1,200 g/t silver. A deposit of that quality is a once-in-a-generation-type discovery. All told, Alexco hopes to uncover more than 100 million ounces of silver in the Keno Hill Silver District.

2) 30 percent growth and counting. Earlier this week, Alexco reported silver production of 581,808 ounces during the first quarter of 2012. That’s a 30 percent increase over Q1 production in 2011. Alexco’s targeting production of 2.2 million to 2.5 million ounces of silver in 2012. In addition, they expect to mine 19 million pounds of lead and more than 7.5 million pounds of zinc at Keno Hill.

3) 10 million ounces a year within five years. Alexco continues to identify new targets at its Yukon properties – namely on the Bermingham and Flame & Moth properties. These new, large targets may have lower grades of silver than Keno Hill, but their sheer size will help the company rapidly boost production numbers.

“These potential mines vastly increase the likelihood Alexco will surpass the 10 million-ounce-per-year hurdle within five years,” says Chris Marchese, contributor to The Morgan Report, in an interview with The Gold Report. “Its Lucky Queen project is averaging over 1,200 grams per ton (g/t) coming on-line before the end of the year, along with Onek. So it has a really deep pipeline for continuous growth into the foreseeable future.”

Mirroring a trend across the mining industry, Alexco’s shares are actually down about 8 percent since the start of the year. The company plans to release new resource statements for its Flame & Moth and Bermingham properties “during the second quarter.” That could be anytime now. If the numbers are good, look for a pop in Alexco’s share price. Look for Alexco to out-perform its peers, too, if investor interest in mining stocks begins to pick up (which we fully expect to happen sometime in 2012).

Like this post? Check out our book, The Top 500 Gold and Silver Mining Stocks, to uncover other undervalued gold and silver mining stocks.

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Up 180%? 10 best gold and silver stocks returns year-to-date

From Wilcat Silver Corp. to Midway Gold Corp., here’s a look at the Top 10 best gold and silver stocks with the biggest returns this year.

Picking winning gold and silver stocks is notoriously difficult. Not only are mining stocks influenced by volatile precious metals prices, they’re also subject to natural disasters, political risk, worker strikes, misinformation and poor assay results. If you can find the right companies with the right management (see my post How to pick gold stocks that outperform the market), the gains can be extraordinary.

Here’s a list I put together of the top 10 biggest gainers in the gold and silver market year to date. I pulled only from the 100 largest gold and silver stocks by market cap:

Stock YTD Gain
NEWSTRIKE CAPITAL INC. (PINK:NWSKF) 181.24%
Midway Gold Corp. (AMEX:MDW) 177.48%
NGEX RESOURCES INC. (PINK:NGQRF) 144.63%
Richmont Mines Inc. (AMEX:RIC) 129.55%
WILDCAT SILVER CORP (PINK:WLDVF) 114.23%
SCORPIO MINING CORP (PINK:SMNPF) 97.62%
PRETIUM RESOURCES INC ORD (PINK:PXZRF) 63.02%
Samex Mining Corp. (OTC:SMXMF) 51.39%
Vista Gold Corp. (AMEX:VGZ) 48.54%
Minefinders Corp. Ltd. (AMEX:MFN) 44.75%

The year-to-date gains listed above are particularly impressive considering the steep losses gold and silver stocks suffered yesterday. Several of the stocks on the list lost nearly 20 percent in a brutal day of trading. Here are my guesses as to why these stocks have out-performed their peers this year:

NEWSTRIKE CAPITAL INC. (PINK:NWSKF): Newstrike’s Ana Paula project in Mexico continues to show impressive drill results. Most recently, the company announced 119.60-meter interval grading 3.76 g/t gold. That’s after results of 230.95-meter interval grading 7.5 g/t gold in April. The Ana Paula project has good pedigree. It was purchased from Goldcorp Inc. (NYSE:GG) last year. Goldcorp still has a robust mine there in Los Filos, and Torex Gold Resources Inc.’s (TSX:TXG) Morelos project is nearby. All three are part of the Guerrero Gold Belt.

Midway Gold Corp. (AMEX:MDW): Company insiders have been big buyers over the past six months snagging 100,000 net shares (per DailyFinance). Analysts have a price target of $3.71 on the stock as drill results from Nevada roll in. Midway’s gained a lot of investor interest thanks to a joint venture with Barrick Gold Corporation (NYSE:ABX).

NGEX RESOURCES INC. (PINK:NGQRF): The company’s Josemaria copper-gold deposit in Argentina has 460 million tonnes of gold (0.30 g/t gold) in the ground. NGEx’s also drilling for potash in Eritrea with results expected next month.

Richmont Mines Inc. (AMEX:RIC): Richmont’s Wasamac gold deposit just seems to keep mushrooming. Most recently, the company intercepted 7.28 g/t gold over 31.40m. The company has interests in 14 projects in Ontario and Quebec.

WILDCAT SILVER CORP (PINK:WLDVF): One of a handful of precious metals stocks that’s focused exclusively on silver, Wildcat Silver Corp. has an 80 percent interest in the Hermosa silver project in Santa Cruz, Arizona. The project has an indicated resource of 36 million ounces of silver and an inferred resource of 85 million ounces. Recent drilling results showed an impressive 230.9 g/t silver.

SCORPIO MINING CORP (PINK:SMNPF): Headquartered in Canada, Scorpio’s mines in Mexico are already in production. Fifty-five percent of the company’s revenue comes from silver – with the rest a mix of zinc, copper and lead. In addition to their operational Nuestra Señora mine, Scorpio has its eyes on more than 40 other exploration targets.

PRETIUM RESOURCES INC ORD (PINK:PXZRF): Much of the excitement around Pretium surrounds the company’s Snowfield deposit. Pretium could join up with mining major Seabridge Gold, Inc. (AMEX:SA) to further explore the project. On top of Snowfield, there’s the “Bonanza-grade” results the company recently announced at its Brucejack Project (5,740 g/t gold and 2,750 g/t silver).

Samex Mining Corp. (OTC:SMXMF): Samex is an early-stage exploration company that’s drilling in the Los Zorros District in Chile. Four out of 46 holes drilled at the Milagro project yielded 4.26 to 5.56 g/t gold.

Vista Gold Corp. (AMEX:VGZ): Impressive results from the company’s Mt.Todd Gold project pushed shares up nearly 20 percent in a day last week. Measured mineral resources were bumped up 23 percent to 353,000 ounces of gold. Indicated resources climbed 14 percent to 506,000 ounces of gold.

Minefinders Corp. Ltd. (AMEX:MFN): Minefinders’ massive Dolores gold and silver mine in northern Mexico is in production and has proven reserves of 1.2+ million ounces of gold and 68+ million ounces of silver. The company’s also evaluating the viability of a mine at its La Bolsa property.

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Beware dead cat bounce in silver prices

I’m inclined to think silver prices could fall further before they sprint higher toward the end of the year. Here are three reasons why you shouldn’t be so quick to jump back into the market.

Silver’s up nearly 10 percent in three day of trading. The powerful rally comes on the heels of last week’s brutal 30 percent peak-to-trough sell-off. Have we put in a bottom or are we in the midst of a dead cat bounce?

I’m inclined to think silver prices could fall further before they sprint higher toward the end of the year. Here’s why:

1) Locking in prices. It’s better to sell any commodity during a rally than it is during a sell-off. The current recovery in silver prices will likely have silver producers jumping on longer-term contracts to lock in silver prices that are at least somewhere close to where they were two weeks ago. That could exert more downward pressure on metals prices.

“In the medium term, we anticipate prices settling lower, in the $28 to $30 an ounce range as companies producing silver as a by-product of gold or base-metal mining add to downward pressure by selling silver forward to lock in current high-price levels,” said Tom Winmill, manager of Midas Fund (MIDSX), told Investor’s Business Daily.

2) Selling begets selling. At least 10 other times in recent history, silver’s had 15+ percent declines in a week, according to Bespoke Investment Group. Of those 10 times, prices bounced the following week, then continued declining for several months. History shows up that massive sell-offs to lead to continued selling for an extended period (a phenomenon that’s often referred to as a consolidation period).

3) A recovery in the dollar. As Jim Puplava loves to say on The Financial Sense Newshour (one of the best finance podcasts on the web, by the way), the dollar looks a bit like the best house in a bad neighborhood. The ongoing crises in the Eurozone, and a disinclination to raise rates across the pond, indicates that the Euro may be in for a more brutal sell-off than our beloved greenback. With investors moving out of precious metals and out of the Euro, a short-term correction for the dollar might be long overdue. Some investors, including WallStreetDaily, are calling for as much as an 8 percent rise in the Dollar Index (DXY) in the coming months.

Summary: The long-term bullish picture for gold and silver remains intact. In the short-term, bears seem to have the upper hand. The powerful rally in silver prices since the start of the year indicates investors were over-leveraged on the metal, and it’s going to take longer than a week to shake those “weak hands” out of the market. If you’re looking to add more silver to your holdings, I’d recommend waiting. You just might be able to get it for less than $30 an ounce before silver starts climbing again … and rest assured it will start climbing again. It just might not happen as soon as most silver investors would like.

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3 reasons a powerful rally in silver mining stocks is overdue

No matter what silver prices do in the near-term, silver mining companies are making money hand over fist. One of these days, the stock market is going to catch on to that fact.

In a single week of trading between May 2 and May 6, 2011, silver spot prices collapsed more than 25 percent on weak economic data, new NYMEX margin requirements and a general sense that the silver market was overheating. On top of that, public SEC filings showed that several noted hedge fund managers and silver bulls had started trimming back their silver holdings as early as February.

Even after last week’s brutal sell-off in the silver market, though, analysts remain bullish on silver mining stocks. Here are three reasons why a powerful rally in silver mining stocks is overdue:

1) The cost of production is static. Even though silver lost more than 25 percent of its value in a single week of trading, the white metal’s still up nearly 20 percent since the start of the year. “The silver companies are making very good money at $35 an ounce,” Sprott Asset Management’s Charles Oliver told Reuters last week. “They’d be making very good money at $30 and most of them would be making very good money at $25.”

Indeed, the article points out that most of the world’s largest silver mining companies report production costs between $4 and $8 an ounce. If they can turn around and sell that silver for $35 an ounce, their profit margins are enormous – even after a drop in the price of silver.

2) Consolidation on the way. The one thing that’s been missing from the 10-year bull market in precious metals has been a wave of buyouts, takeovers and consolidation in the mining space. The world’s largest mining companies are sitting on war chests full of cash, and they’ll likely target junior mining companies to ensure a steady supply of silver in the years to come.

Silver Wheaton Corp.’s (NYSE:SLW) CEO Randy Smallwood went on the record last month predicting a wave of buyouts after silver prices stabilize. Smallwood argues that small cap silver mining stocks don’t want to sell when prices are rising rapidly. The fear, of course, is that they could have gotten more money for their company and operations if they’d held out for a few more months. This steep correction in silver prices could be just the opportunity Silver Wheaton and other silver mining giants have been waiting for.

3) The fundamental trend is up. Extreme market volatility can make anyone question their reasons for investing in silver, but the long-term trend remains intact. The Federal Reserve’s continuing its inflationary monetary easing program and interest rates remain near zero. The net effect is a dollar that’s headed down.

ShadowStats.com calculates the inflation rate at 10 percent using formulas our own government used just two decades ago (before they began stripping out costs for things like food and energy from the CPI). In such an environment, holding your cash in a low-interest bank account is akin to losing 10 percent of its purchasing power every year. By contrast, silver prices are still up nearly 20 percent this year, and they’ll likely head higher by 2012. No matter what the silver price does in the near-term, though, silver miners are still making money, and they’re doing it hand over fist. One of these days, the stock market is going to catch on to that fact.

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3 reasons the rally in gold and silver prices is far from over

Precious metals investors may be jittery, but the decade-long bull market in gold and silver far from over. Here are three reasons why investors should keep allocating cash to gold and silver.

Silver investors got a rude awakening at the start of trading yesterday. Spot prices for the metal tumbled more than 12 percent in early-morning Asian trading on Monday. We’ve heard a lot of excuses for the manic plunge, the most prominent of which is an unexpected surge in silver margin requirements on the Comex that went into effect at the close of trading on Friday.

Regardless of the reason, precious metals investors are jittery. But I’m far from convinced the decade-long bull market in gold and silver is drawing to a close. Here are three reasons why investors should consider staying the course:

1) The fundamentals haven’t changed. Everyone knows gold and silver coins and bars don’t actually do anything. They’re pretty to look at, but they don’t pay dividends and you can’t use them to pay for gas at the local Speedway (not yet anyway). The fact that they don’t do anything, though, is what makes them valuable. Precious metals are finite. The government can’t make more.

The government can, however, print more dollars. As the total number of dollars in circulation increases, the laws of supply and demand kick in. Suddenly, those greenbacks buy less gold and silver. In dollar terms, the “value” of your gold and silver goes up.

Beginning investors understand as much, but they still argue that it’d be better to hold something else, oil perhaps, or real estate. Unfortunately, there are problems inherent in oil and real estate – particularly during periods of rapid inflation.

Think back to 2008 when oil screamed up to record highs around $140 a barrel. Prices for just about everything else started rising, too, and that ultimately ground the global economic engine to a halt. Before long, oil was trading at $40.

How about real estate? If you’ve got enough cash to buy a sprawling apartment complex, I’d recommend doing so. You could get a low-interest loan, steady returns and a fair degree of insulation from inflation (so long as you have the ability to raise your rental rates every year). If you don’t have that kind of cash, though, the costs of entry in the housing market are too high and the market too illiquid to be practical for most investors.

That leaves gold and silver. The market is small, volatile and often stomach-churning, but the barriers to entry are low, and the metals are good at what they do: acting as a store of value during periods of high inflation.

Make no mistake that inflation has arrived, either. Official numbers might peg it shy of 2 percent, but if you calculate inflation the way our government did just 20 years ago, we’re already living with double-digit inflation. That means those dollars you’ve got sitting in your bank account are shrinking … and that’s not good for anyone.

2) 10 percent inflation is just the beginning. The Federal Reserve has made it clear that they’re going to see QE2 through to the bitter end. The massive bond-buying program is slated to end in June, but that’s two more months of massive capital injections. On average, the Fed is pumping $2.5 billion into the economy every day.

$2.5 billion is a vague number that’s hard to digest, but think about the fact that the Federal government nearly shutdown three weeks ago when Congress couldn’t come to an agreement on trimming a mere $39 billion from the 2011 fiscal year budget. QE2 is pumping that much cash into the economy every two weeks!

On top of that, Fed Chairman Ben Bernanke reiterated his promise to keep interest rates near zero for the “foreseeable future.” It’s all fuel for an inflationary fire that’s already smoldering. And the danger is, the Fed won’t be able to put that fire out without rapidly raising interest rates – something that would threaten to topple the U.S. into yet another recession.

3) Corrections are normal. Markets never move in a straight line. Rapid price run-ups are tempered by corrections and consolidation periods. Of course, it’s hard to remember that when you’re watching the net value of your portfolio crumple in a short-term sell-off. Rest assured, though, there are lots of long-term gold and silver bulls out there – even at the world’s biggest investment banks.

“Gold has hit our target of $1500-1600 and the long term target for next few years is $2000-3000,” Merrill Lynch analysts wrote last week (per Barron’s). “Silver should consolidate near-term as it challenges its all-time high – support is in the low $30’s. Longer-term, silver should re-challenge $50 and then target a move toward $80 (an ounce).”

What happens in the near-term is anyone’s guess. Just don’t buy the hype and get out of precious metals altogether. Gold and silver’s brightest days appear to lie ahead.

No love for gold and silver mining stocks

The next boom in gold and silver space might not be in the physical metals themselves but rather in the shares of mining companies. Silver mining stocks are up just 5 to 10 percent on average this year (per Forbes). By comparison, silver bullion’s rallied more than 43 percent since the start of the year and 171 percent over the past 12 months. Gold has trailed silver’s performance, but it’s still clocked gains of 30 percent over the past year.

Once mining companies start turning those price gains into robust earnings, sentiment toward the stocks just might change – even with all the noise and volatility in the spot market. It’s profits, after all, that do the talking. And we’d do well to listen.

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