As silver prices touch multi-decade highs, a senior mining analyst is sounding the alarm against rising investor exuberance, particularly in the junior mining space, which primarily consists of companies involved in the early exploration and development of mines.
Market Enthusiasm Could Unwind Rapidly
Appearing on the Resource Talks podcast on Saturday, Joe Mazumdar, who is a senior mining analyst at Exploration Insights, said he has become increasingly uneasy with the way some investors are valuing silver companies, pointing to what he described as overly simplistic.
“What I’ve seen out there recently that kind of rubs me the wrong way,” he said.
Mazumdar said a growing number of silver stocks are rising despite having little to justify the move fundamentally, as investor enthusiasm appears to be overtaking basic due diligence.
“They haven’t had a lot of operational success, they’re carrying debt that’s due next year,” and yet the stock continues to rally along with the prices of silver.
He cautioned that today's enthusiasm could unwind rapidly once prices turn, creating dangerous exit conditions for investors. “There’ll be a liquidity issue when you want to sell,” he said, noting that investors will head to the exits all at once, when the prices of gold and silver drop.
Mazumdar said the surge in financing activity across the sector is beginning to resemble classic late-cycle behavior, a pattern that often appears when market optimism peaks. “Everything is going up,” he said, and “everybody’s got the same valuation.”
Junior silver miners and ETFs have posted strong performances over the past year, rising in tandem with the commodity.
Silver To Continue Soaring
While not all silver mining stocks are worthy of the sheen, the metal’s underlying momentum itself continues to remain intact, with experts predicting significantly more upside this year, following its 155% rally in 2025.
Economist Peter Schiff has termed this rally as a rotation away from stagnating assets such as Bitcoin (CRYPTO: BTC), giving rise to what he called, “the biggest precious metals bull market in history.”
Schiff, however, said last week that the commodity’s monumental rally is yet to be fully priced in among miners and junior miners. In a post on X, he said that given the sharp rise in prices over the past month, “silver stocks should have doubled,” while adding that investors continue to remain in “denial.”
Shares of Amplify Junior Silver Miners ETF were down 0.80% on Friday, closing at $27.45, and are up 2.99% overnight.
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