AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
After eight consecutive trading days of hitting historic highs, the price of gold plummeted due to robust U.S. CPI data, but this dip turned out to be a precursor to another surge. On Thursday, spot gold continued its upward trend, reaching $2390 per ounce, setting yet another record high.
While the skyrocketing gold prices may be intimidating, what may come as a surprise is that in the past six months, gold prices have surged by nearly 23%, while silver prices have risen by over 25% during the same period, surpassing gold in terms of growth.
Despite this, analysts at Heraeus, a precious metals analysis firm, recently pointed out that gold appears to be overbought, indicating a potential correction in the near future. However, they anticipate that silver will receive support both from investment and industrial demand. Currently, the price of silver is nearing $29.
Both gold and silver possess dual attributes as currencies and commodities, with gold leaning more towards being a currency and silver being more commodity-oriented. According to data from the Silver Institute, as of 2022, global silver demand totaled 38,643 tons, with industrial, physical investment, jewelry, and other demands accounting for 44.8%, 26.8%, 18.8%, and 9.6%, respectively. Industrial demand consistently comprises over 40% of the total demand.
Concerning the trend of silver prices, given the strong correlation between silver demand and the global manufacturing cycle, silver prices naturally fluctuate in accordance with the manufacturing cycle. When there is robust economic recovery momentum and an increase in industrial demand and equipment investments, silver’s price surge tends to be more significant. Recent manufacturing data from the United States and China has been robust, with China’s photovoltaic installations continuing to grow.
As early as July last year, Jan Alston, President and CEO of CMX Gold & Silver (CSE: CXC; OTC: CXXMF), expressed during an interview at the “Metals 100” event that he had been studying the silver market for over a decade. He highlighted that despite the futures market consistently suppressing silver prices, the industry’s fundamentals eventually overcame financial market influences, with supply constraints and shortages becoming new realities. Therefore, he foresees silver outperforming other metals.
Compared to gold, silver has a higher beta, resulting in an average price volatility of approximately 2 to 3 times that of gold when moving in the same direction. Hence, if retail investor interest increases and drives growth in silver ETF holdings, silver has a good chance of outperforming gold in the future. Unlike the gold market, silver investors have re-entered the ETF market, with silver ETF inflows of 10.7 million ounces over the past two weeks, leading to a total increase in holdings by 3% to 724 million ounces.
Furthermore, it is noteworthy that the price trends of silver and copper are moving in sync, with copper being a recent strong performer.
