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As Stocks Slip, Miners Rally—Don’t Miss This Shift

Posted March 12, 2025

Sean Ring

By Sean Ring

As Stocks Slip, Miners Rally—Don’t Miss This Shift

Did it finally happen yesterday? Did the gold and silver miners finally have a day for the ages? Did yesterday finally mark the day the miners would participate in and lead the market?

There’s compelling evidence that’s exactly what happened.

Since my friend and colleague Adam Sharp wrote an excellent piece for yesterday’s Daily Reckoning titled “Silver as a Hedge Against Market Chaos,” I’ll build on it in today’s Rude.

With market volatility rising (the VIX has been over 20 for the last 10 trading sessions), investors—institutional, not retail—again turn to precious metals as a hedge against economic uncertainty.

Silver, often referred to as "the poor man's gold," historically plays an essential role in wealth preservation, just like its more famous counterpart. But as market chaos intensifies, it’s not just about holding physical gold and silver—it’s also about owning the miners who extract these metals from the ground.

Reminder: The Role of Precious Metals in Times of Crisis

I don’t care if you think gold is a “barbarous relic” like Keynes did.

Gold and silver have been trusted stores of value for centuries, particularly during inflationary periods and economic downturns. In today’s climate of perhaps self-inflicted geopolitical tensions, interest rate uncertainty, and global debt concerns, these metals are again proving their worth.

For thousands of years, gold has been a safe haven during financial instability. Investors turn to it when fiat currencies become unstable or inflation erodes their money's purchasing power. Silver also acts as a store of value but has the additional benefit of being an industrial metal used in electronics, solar panels, and batteries, giving it both intrinsic value and practical applications.

The mining companies that produce these metals offer leveraged exposure to price increases. When gold and silver prices rise, miners’ stock prices typically rise by a much higher percentage compared to the metals themselves. This makes mining stocks attractive for those looking to maximize their returns in a precious metals bull market.

A Look at Yesterday’s Mining Stock Performance

Let’s examine how my mining stocks performed yesterday:

  • Endeavour Silver Corp. (EXK): Trading at $4.52, up a whopping 24.18% from its previous close.
  • First Majestic Silver Corporation (AG): Up 10.54%, currently priced at $6.13. Price target: $6.83.
  • Abrasilver Resource Corp (ABRA): Up 8.96% to $3.41. Within 9 cents of its daily closing 5-year high.
  • Avino Silver & Gold Mines Ltd. (ASM): Up 8.46%, rising to $1.41 and looking at $1.60 for a conservative price target.
  • Sibanye Stillwater Limited (SBSW): Up 7.73%, trading at $4.04. It’s utterly painful owning this Platinum Group Metals play from South Africa. Returning to its one-year closing high of $5.70 would be a victory. This is my least favorite stock, but it has enormous upside potential.
  • Orla Mining Ltd. (ORLA): Up 7.59%, now at $7.80. Got this call from the gentlemen at Northstar Charts, and it’s been a peach since the day they made the call, up over 64% in total. ORLA just hit its upside target of $7.88, but I think there’s more to go.
  • Coeur Mining Inc. (CDE): Up 6.63%, trading at $5.47, its upside target. But I’m looking at $7.47 as the next upside target.
  • Kinross Gold Corp. (KGC): Up 5.78%, climbing to $11.17. I’m looking for a new high at $12.75.
  • Freegold Ventures (FVL): Up 4.94%, to C$0.85. New target: C$1.28.
  • Integra Resources Corp. (ITR): Up 1.96%, to C$1.56. Looking at $1.80.

Disclosure: I have owned all these mining stocks since November. If you don’t like my list, renowned mining investor Don Durrett posted his winner’s list here.

This surge in mining stocks underscores the current trend of capital rotation amid concerns over inflation, recession fears, and declining confidence in central bank policies.

Why Miners and Not Just Physical Metals?

While holding physical gold and silver is an excellent long-term strategy, mining stocks offer additional advantages:

  1. Leverage on Metal Prices – Mining companies outperform with higher profit margins and increased production efficiency when precious metal prices rise.
  2. Dividend Opportunities – Some mining companies pay dividends, providing income in addition to capital appreciation.
  3. Operational Growth Potential – Unlike static physical metal holdings, mining companies can expand their reserves and production capacity, leading to potential stock price appreciation beyond the underlying metal price movement.

Why Now?

The financial world is experiencing a perfect storm that supports higher gold and silver prices:

  • Geopolitical Risks – Rising tensions between global superpowers, particularly between the U.S., China, and Russia, increase gold demand.
  • Inflation & De-Dollarization – Central banks worldwide are accumulating gold as they hedge against the weakening purchasing power of fiat currencies.
  • Dying Sentiment - In his article yesterday, Adam mentioned the U.S. stock market was never more overvalued than it is now. That’s true by several measures. But what’s worse than overvaluation is sentiment change. Most investors are fearful, and not greedy anymore.

Adam wrote, “After bubbles pop, investors tend to rotate into precious metals and other hard assets. Part of the reason is that the Federal Reserve and other central banks tend to start printing a lot of money as stocks crash, in an attempt to save the market. But it’s also a cyclical thing…”

We’re seeing the end of the exuberant enthusiasm of investors who BTFDed every sell-off. With the president shooting from the hip, investors are less confident than ever.

Finally, we’re seeing the every-once-in-a-while capital rotation event (CRE) Northstar Charts has warned about for a long time. They posted this meme on X yesterday:

pub Credit: @NorthstarCharts

If their thesis is correct, and I believe it is, it’ll mark a sea change in the markets not seen since 2002.

pub Credit: @Northstar Charts

Once the SPX and Nazzie break versus gold, as they are, the CRE will be confirmed. We should have monthly and quarterly proof of this by the end of March.

Wrap Up

With market turmoil hitting harder than ever, owning gold and silver miners is necessary for those looking to protect and grow their wealth. The current landscape is increasingly favoring hard assets, and as history has shown, gold and silver tend to thrive when confidence in the financial system wanes.

Reader, those stocks are still cheap on a relative and absolute basis. Wait for a pullback, then get in if you haven’t already.

Have a great day!

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