By Andrew Bary

Silver's Friday tumble is proof that what goes up must come down -- even in the financial markets. But with the precious metal suffering its worst day since 1980, the mining stocks may be worth buying.

What a ride it has been for silver. Prices were up almost 50% in 2026, to $100 an ounce, through Thursday's close, and had tripled over the past year, with the metal trading as high as $120 an ounce this past week. Silver miners had done well, too, with the largest silver mining exchange-traded fund, the $5 billion Global X Silver Miners (ticker: SIL), up 20% this year through Jan. 29.

Then it all fell apart. This past week was one of the most volatile periods ever, capped by a 31% drop in silver to $85 an ounce on Friday, the largest absolute drop in history and the biggest percentage decline since the Hunt Brothers tried -- and failed -- to corner the market in 1980. The Silver Miners ETF, home to Pan American Silver, First Majestic Silver, and Hecla Mining, among others, has also been caught up in wild price swings, falling 14% on Friday.

The obvious question is whether to buy the stocks on the dip amid concerns that a possible silver bubble just popped. While risks are high, the bullish argument for silver is based on strong industrial demand, ongoing supply deficits now around 200 million ounces a year -- 20% of overall demand -- and rising investor interest, particularly in Asia, where silver trades at a premium to levels in New York and London. The miners, meanwhile, have trailed gains in silver during recent months, making them, perhaps, a less risky bet.

A major factor driving up precious metals is investment demand, which is the product of multiple forces. But the most important factor might be the "debasement trade," the idea that the dollar is falling due to chronic federal deficits, potentially higher inflation, and a Trump administration that seems happy to see the greenback decline to make U.S. exporters more competitive. Other fiat currencies, including the yen and the euro, are also losing their luster. While gold is the primary beneficiary of debasement, silver also has gained, and investors can buy silver stocks as a hedge against falling currencies and financial assets like stocks and bonds.

President Donald Trump's nomination of Kevin Warsh on Friday to be chair of the Federal Reserve may have contributed to the losses in gold and silver because he's viewed as more of an inflation hawk than others that Trump considered.

Wealth managers have been slow to accept the utility of precious metals in portfolios -- a potentially bullish factor. Most U.S. individual investors have little or no exposure to gold -- and even less to silver.

A Citigroup analyst team led by Max Layton wrote recently that silver is behaving like " 'gold squared' or 'gold on steroids,' and we think that likely continues until silver looks expensive by historical standards, relative to gold." Citi sees an upside for silver in coming weeks to $150 an ounce.

Silver miners are already highly profitable and should benefit from rising prices. Their average all-in costs range from $20 to $25 an ounce, and they offer production growth, rising dividends, and operating leverage, meaning their profits should rise faster than silver's gains. While the stocks notched huge increases over the past year, they are lagging behind silver this year.

Despite Friday's losses, 2026 should be a financial bonanza for the silver miners, with profits up sharply from 2025 when silver averaged $40 an ounce, and 2024, when the industry operated around break-even. And with the stocks now estimated to be discounting a silver price that's 15% to 20% below spot silver, the shares may have a buffer to more volatility. "The margin expansion and the amount of free cash flow is unprecedented," says TD Cowen precious metals analyst Wayne Lam. His view was that if the metal dropped, the stocks would outperform, which they did on Friday.

The miners should also benefit from scarcity value. There aren't many mines globally whose primary product is silver -- more than 70% of mined silver comes as a byproduct of other metals, mostly gold. Five leading silver producers -- Hecla Mining, Coeur Mining, Fresnillo, Pan American Silver, and First Majestic Silver -- have a combined market value of about $110 billion, less than top gold producer Newmont.

Mining isn't an easy business. There are operational challenges, including the need to replace reserves when permitting is difficult in much of the world. Many silver mines are in Latin America, where political winds can quickly shift. High prices may also bring a supply response. For instance, silver now accounts for an estimated 30% of solar-panel costs, up from 5% two years ago, and consumers of the metal might seek cheaper alternatives. Coin dealers say silver is coming out of the woodwork as Americans cash in family silver -- a single sterling-silver five-piece place setting contains about $400 in silver.

Many pros follow the gold/silver ratio, which moved sharply in favor of silver in the past year as it outpaced gold before a sharp correction on Friday. The ratio now stands at more than 55, below the average of 65 over the past 50-plus years and a peak of over 100 in April. The ratio got as low as 45 recently. The large increase in the ratio on Friday could signal that the worst may be over for silver.

Each miner brings something a little different. Fresnillo is the world's largest silver miner, with projected output of 44 million ounces this year. The Mexican company has four silver mines in that country, including its namesake facility that has operated since 1554, not long after the Spanish conquest. Silver accounts for about 45% of its production, with gold most of the balance.

The stock trades mainly in London with lightly traded U.S. shares under the ticker FNLPF. J.P. Morgan Securities analyst Patrick Jones wrote recently that the stock could be worth 60 pounds sterling ($82.25), up from a recent 37 pounds, assuming $5,000 gold and $100 silver. He sees a "rerating" of the stock even after its sixfold gain in 2025.

Hecla is the largest silver producer in the U.S. and Canada and emphasizes those safe jurisdictions. It also has some of the best silver exposure of any sizable mining company, at about 50% of revenue. The company has undergone a turnaround under CEO Robert Krcmarov, who joined in November 2024. At Hecla's investor day this past week, he said "the fundamentals are excellent. We have great operating assets, high grades, lowest cost quartile, long-lived mines."

The stock has fallen 15% from recent highs after disappointing guidance on 2026 production of nearly 16 million ounces, down from 17 million in 2025, although the company sees potential for 20 million, which may offer an opportunity to buy on the dip.

Coeur will get about 25% of its revenue from silver after its planned merger with New Gold, making it a more diluted silver play. The company expects to generate $2 billion of free cash flow in 2026, with about 80% of production coming from the U.S. and Canada. TD Cowen's Lam likes the stock and the deal, which positions the company to enter the S&P mid-cap index, given a combined market value of over $20 billion.

Vancouver-based First Majestic, which operates mines in Mexico, is a favorite of many retail investors for its sizable silver exposure at about 60% of projected 2026 revenue. But Mexico can be a tricky place to operate. Current President Claudia Sheinbaum is more favorably inclined to the industry, but the prior administration was not. Lam favors the company, due in part to its leverage to silver, which is the highest among its peers.

Vancouver-based Pan American Silver is one the largest silver producers, with an estimated 26 million ounces this year, up from 23 million ounces in 2025. The company is the second-largest silver stock by market value behind Fresnillo and gets about 40% of revenue from the metal. Its silver mines are concentrated in Latin America. The stock trades for 20 times estimated 2026 earnings, a discount to the group, and is favored by RBC analyst Josh Wolfson.

For investors who want silver without the operational risk, there are precious metals streamers like Wheaton Precious Metals. Streamers invest in mines in return for a stream of their annual production at favorable prices, and Wheaton has more silver exposure than the other big streamers -- Franco-Nevada and Royal Gold. Wheaton's market value of $70 billion also makes it the largest silver play available to investors.

A benefit of the asset-light streaming structure is that it eliminates a major risk -- higher production costs. As a result, streamers tend to trade at higher valuations than miners. Many investors may recoil at paying 40 times estimated 2026 earnings for Wheaton, but it offers a growth story with projected output rising to 950,000 gold equivalent ounces annually from 2030 to 2034, up from about 635,000 in 2025. RBC's Wolfson wrote recently that silver is now up to about 50% of its projected 2026 revenue at spot prices and that Wheaton's ratio of price/estimated net asset value is near a one-year low.

Investors leery of single stocks can always choose an ETF. The largest, Global X Silver Miners, is a passive fund that has exposure to some of the largest producers. Wheaton Precious Metals, Pan American Silver, Coeur, and Hecla make up over 40% of the $5 billion fund. An alternative ETF, the $1 billion Sprott Silver Miners & Physical Silver, is more "silvery" since it focuses on companies that get 50% or more of their production from silver. First Majestic makes up 25% of the ETF, followed by the Sprott Physical Silver Trust ETF at 20%. The Sprott ETF outperformed the Global X ETF last year due to its weighting in purer silver plays, but it may carry more risk with its exposure to smaller companies.

Write to Andrew Bary at andrew.barry@barrons.com

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January 30, 2026 17:17 ET (22:17 GMT)

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