Top 3 Silver Picks to Watch as Bull Market Gains Steam

Silver prices have broken above $37 per ounce, attracting investor attention due to supply constraints and its relative undervaluation compared to gold, as reflected in the historically high silver-gold ratio of 91. Investors can gain exposure through miners like Pan American Silver (PAAS), which is expanding through acquisition, and Endeavour Silver Corp (EXK), which is increasing production; both have seen recent stock price surges potentially fueled by short covering. The iShares Silver Trust (SLV) offers another avenue, mirroring the spot price of silver with high liquidity, though investors should note the 0.5% expense ratio.

Analysis

Silver has demonstrated significant upward momentum, breaching the $37 per ounce technical level, with analysts noting minimal resistance towards its historical high around $50. This price movement is underpinned by a compelling supply-demand narrative, including increased global demand factors since the last major silver spike in 1979 and concerns over diminishing silver reserves and lagging mining production. The historically high silver-gold ratio, currently at 91, further suggests silver's relative undervaluation and potential attractiveness. Investors can access this theme through various instruments: the iShares Silver Trust (SLV) offers direct exposure to physical silver prices, having risen 28.4% year-to-date mirroring spot silver, with strong liquidity and a 0.5% expense ratio. Among mining equities, Pan American Silver Corp. (PAAS), the world's fifth-largest producer with 21.1 million ounces in 2024, is actively expanding via a $2.1 billion acquisition of MAG Silver, contributing to its 44.8% stock price increase in 2025 and 28.9% in the last 30 days. Endeavour Silver Corp. (EXK), a mid-tier miner, anticipates doubling its silver equivalent production from its Terronera mine by 2025-2026 and has seen its stock surge over 49% in the past month. However, for both PAAS and EXK, a recent rise in short interest (18% for PAAS last month despite only being ~2% of float) suggests a portion of their substantial stock gains may be due to short covering, warranting investor caution regarding potential pullbacks.

Key Decisions for Investors

• Investors should consider the strong fundamental and technical case for silver, driven by supply constraints and its current valuation relative to gold.
• For direct commodity exposure, the iShares Silver Trust (SLV) provides a liquid vehicle tracking silver prices, though the 0.5% expense ratio should be factored into investment decisions.
• While Pan American Silver (PAAS) and Endeavour Silver (EXK) offer leveraged exposure to rising silver prices and have shown significant recent stock appreciation, the notable increase in short interest suggests caution; investors might await potential pullbacks or scale into positions due to the risk of gains being partly attributable to short covering.