Two metals that led the strong gains in the Toronto markets for 2011 are losing luster. Silver and gold, metals that reached all-time highs in the past quarter, continue to struggle.
To illustrate, Barrick Gold is trading near a 52-week low. Silver (represented by Silver Wheaton) is trading below for 2011, a trend that does not appear to be reversing.
Bottom-fishers will eventually pick at these stocks, but the intermediate momentum is down.
Still, some analysts remain positive in these companies. As Reuters reported:
"It's not like on a financial basis the stocks are performing worse, worse and worse," said Dahlman Rose analyst Adam Graf. "Most of them are earning lots of profits and they are accumulating cash on the balance sheets."
That outlook remains to be seen. With producer costs a variable to the equation, the risk is higher for holding mining stocks over ETFs that mirror that value of the metal.
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