When the Metal Shines But the Miners Don't
Here's a head-scratcher for you: silver has been on an absolute tear, yet the companies that actually dig the stuff out of the ground are acting like nothing special is happening. Economist Peter Schiff, who's never met a hard asset he didn't like, is calling out what he sees as a glaring market inefficiency.
In a series of posts on X this week, Schiff pointed out that while silver tracked by the iShares Silver Trust (SLV) jumped 35% in December, the Global X Silver Miners ETF (SIL), which follows the major silver mining companies, managed a measly 11% gain. That's not how this is supposed to work.
"Investors are in denial," Schiff declared, noting that silver prices climbed another $4 on Tuesday morning while miners still hadn't captured the move.
The Leverage That Wasn't
The whole point of owning mining stocks instead of the metal itself is leverage. When silver goes up, mining companies should theoretically benefit even more because their profit margins expand dramatically. A 35% move in the underlying commodity should translate into outsized gains for the producers.
"Given that move, silver stocks should have doubled" over the course of December, Schiff argued. Instead, they barely participated in the rally.
The disconnect became even more obvious during Monday's price action. Silver experienced a steep reversal, giving back most of Friday's gains. But according to Schiff, the real overreaction happened in the equity market. Even though the commodity was still "about 10% above the prior week's close," silver mining stocks gave up all of last week's gains, even though they "barely rose on Friday" to begin with.
For Schiff, this mismatch screams opportunity. "Following a 14% silver correction, silver stocks are even better buys now," he said.
The Numbers Tell the Story
Despite silver notching its strongest monthly rally since the late 1970s and climbing 154.57% year-to-date, the mining sector has been left in the dust. Leading silver mining stocks, junior miners, and ETFs have all significantly underperformed the metal itself.
Here's how the major players stack up:
| Stocks / ETFs | Year-To-Date Performance | Month-To-Date Performance |
| Wheaton Precious Metals Corp. (WPM) | +104.72% | +8.09% |
| Americas Gold And Silver Corp. (USAS) | +444.90% | +13.14% |
| Coeur Mining Inc. (CDE) | +191.77% | +6.66% |
| Aya Gold & Silver Inc. (AYASF) | +89.60% | +7.42% |
| New Pacific Metals Corp. (NEWP) | +181.75% | +24.56% |
| Pan American Silver Corp. (PAAS) | +146.56% | +14.34% |
| First Majestic Silver Corp. (AG) | +170.08% | +6.76% |
| iShares MSCI Global Silver and Metals Miners ETF (SLVP) | +186.05% | +8.80% |
| Amplify Junior Silver Miners ETF (SILJ) | +167.40% | +7.86% |
| Global X Silver Miners ETF (SIL) | +158.18% | +9.53% |
Look at those month-to-date numbers. Most are stuck in the single digits to mid-teens, even as silver itself rocketed 35% higher. New Pacific Metals (NEWP) stands out with a 24.56% monthly gain, but that's still well short of the 2x leverage you'd typically expect from a mining stock.
Where Things Stand Now
Silver prices soared over 6% to $76 per ounce on Tuesday. As of Wednesday early morning, the metal pulled back slightly, down 1.44% to $75.13 per ounce.
The Global X Silver Miners ETF (SIL) climbed 1.38% on Tuesday to close at $85.51 and added another 0.57% in overnight trading. The fund scores high on momentum in market data rankings, showing favorable price trends across short, medium, and long-term time frames.
Whether Schiff is right about investor denial or there are structural reasons for the underperformance, one thing is clear: the usual relationship between silver prices and mining stocks has broken down. For investors willing to bet that relationship will reassert itself, the gap might represent opportunity. For those who think the market is pricing in risks Schiff is overlooking, maybe the caution is justified. Either way, it's one of the more interesting disconnects in the commodities space right now.