Hecla Mining Shares Drop Amid Precious Metals Weakness
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Fool
- Stock Decline: Hecla Mining's shares fell nearly 3% on Tuesday due to weakness in precious metal prices, highlighting the company's vulnerability as the largest primary silver miner in North America, where even minor fluctuations in metal prices can significantly impact its fundamentals due to high fixed costs.
- Employment Data Impact: The latest U.S. non-farm payroll data showed an increase of 172,000 jobs, far exceeding Dow Jones estimates, which raises the likelihood that the Federal Reserve will maintain higher interest rates for longer, thereby diminishing the appeal of precious metals as non-yielding assets become less attractive to investors.
- Market Environment Shift: Precious metals had been in a holding pattern since mid-May, but the release of employment data has shifted market sentiment, leading to reduced investor interest in gold and silver, which places additional pressure on Hecla Mining amid changing market dynamics.
- Geopolitical Risks: Despite a previous bull run in precious metals that saw new highs, ongoing geopolitical tensions and economic challenges suggest that analysts recommend avoiding Hecla Mining and other precious metal miners in the current environment to mitigate potential risks.
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Analyst Views on HL
Wall Street analysts forecast HL stock price to rise
7 Analyst Rating
2 Buy
4 Hold
1 Sell
Hold
Current: 14.990
Low
16.00
Averages
23.93
High
36.50
Current: 14.990
Low
16.00
Averages
23.93
High
36.50
About HL
Hecla Mining Company is a silver producer in the United States and Canada. It discovers, acquires and develops mines and other mineral interests and produces and markets concentrates containing silver, gold, lead, zinc and copper; carbon material containing silver and gold, and unrefined dore containing silver and gold. Its segments include Greens Creek, Lucky Friday, and Keno Hill. Greens Creek operation is located on Admiralty Island, near Juneau, Alaska. The Greens Creek property includes over 440 unpatented lode mining claims, 58 unpatented mill site claims, 21 patented lode claims and one patented mill site. Lucky Friday mine is a deep underground silver, lead, and zinc mine located in the Coeur d'Alene Mining District in northern Idaho. The Keno Hill unit is located in the central Yukon Territory, Canada, and covers an area of approximately 15,000 hectares in central Yukon. The total Hecla Keno Hill mineral claims cover an area of approximately 238.12 square kilometers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Stock Decline: Hecla Mining's shares fell nearly 3% on Tuesday due to weakness in precious metal prices, highlighting the company's vulnerability as the largest primary silver miner in North America, where even minor fluctuations in metal prices can significantly impact its fundamentals due to high fixed costs.
- Employment Data Impact: The latest U.S. non-farm payroll data showed an increase of 172,000 jobs, far exceeding Dow Jones estimates, which raises the likelihood that the Federal Reserve will maintain higher interest rates for longer, thereby diminishing the appeal of precious metals as non-yielding assets become less attractive to investors.
- Market Environment Shift: Precious metals had been in a holding pattern since mid-May, but the release of employment data has shifted market sentiment, leading to reduced investor interest in gold and silver, which places additional pressure on Hecla Mining amid changing market dynamics.
- Geopolitical Risks: Despite a previous bull run in precious metals that saw new highs, ongoing geopolitical tensions and economic challenges suggest that analysts recommend avoiding Hecla Mining and other precious metal miners in the current environment to mitigate potential risks.
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- Silver Price Drop: Spot silver decreased by 2% to $64.01 per ounce, with futures down 1.6%, indicating a weakening of market demand for precious metals, which could adversely affect related ETFs and mining companies' stock performance.
- Market Sentiment Weakens: Stocks and funds linked to gold and silver saw widespread declines in pre-market trading on Wednesday, with the ProShares Ultra Silver ETF down 2.8% and First Majestic Silver dropping 3.8%, suggesting a loss of confidence in precious metals and prompting investors to reassess their portfolios.
- Macroeconomic Impact: A commodities strategist at ING noted that the market's focus has shifted back to rates and inflation, putting pressure on non-yielding assets like gold and silver, and it is expected that prices will continue to be influenced by macroeconomic factors, particularly in light of the Fed and ECB's monetary policy outlook.
See More
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- Employment Data Impact: The latest U.S. non-farm employment statistics revealed 172,000 new jobs created, significantly exceeding Dow Jones estimates, which has raised expectations for the Federal Reserve to maintain or increase interest rates, thereby putting pressure on precious metal prices.
- Hecla Mining Stock Decline: As the largest primary silver miner in North America, Hecla Mining's shares fell nearly 3% during Tuesday's trading, reflecting market concerns over the continued weakness in precious metal prices, particularly given the company's high fixed costs.
- Investor Sentiment Shift: The strong employment data raises inflation concerns, diminishing the appeal of non-yielding assets like precious metals, leading to reduced investor interest in Hecla and other precious metal mining companies, creating an unfavorable market environment.
- Cautious Market Outlook: Despite precious metals having experienced a bull run and reaching all-time highs, analysts recommend caution regarding Hecla Mining's stock due to ongoing geopolitical tensions and economic uncertainties.
See More
Hecla Mining Shares Drop Amid Precious Metals Weakness
- Stock Decline: Hecla Mining's shares fell nearly 3% on Tuesday due to weakness in precious metal prices, highlighting the company's vulnerability as the largest primary silver miner in North America, where even minor fluctuations in metal prices can significantly impact its fundamentals due to high fixed costs.
- Employment Data Impact: The latest U.S. non-farm payroll data showed an increase of 172,000 jobs, far exceeding Dow Jones estimates, which raises the likelihood that the Federal Reserve will maintain higher interest rates for longer, thereby diminishing the appeal of precious metals as non-yielding assets become less attractive to investors.
- Market Environment Shift: Precious metals had been in a holding pattern since mid-May, but the release of employment data has shifted market sentiment, leading to reduced investor interest in gold and silver, which places additional pressure on Hecla Mining amid changing market dynamics.
- Geopolitical Risks: Despite a previous bull run in precious metals that saw new highs, ongoing geopolitical tensions and economic challenges suggest that analysts recommend avoiding Hecla Mining and other precious metal miners in the current environment to mitigate potential risks.
See More
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- Strong Employment Data: US nonfarm payrolls rose by 172,000 in May, significantly exceeding expectations of 88,000, while the unemployment rate held steady at 4.3%, potentially prompting the Fed to consider a rate hike at the upcoming meeting, thereby affecting market liquidity and investor sentiment.
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