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Silver Soars: BlackRock Sees Gold in Industrial Metal
14 Jan
Summary
- Silver spot prices have surged 27% year-to-date.
- BlackRock shifted to silver equities in 2024 for better returns.
- Company management's cash flow allocation is key for 2026.
Silver's upward trajectory is gaining momentum, with spot prices already up 27% year-to-date. This rally has significantly boosted the performance of equities linked to the metal, with London-listed shares of Fresnillo reaching a record high. Evy Hambro, Global Head of Thematics and Sector Investing at BlackRock, revealed that the firm began investing in silver-related equities in 2024.
This strategic move into equities occurred once silver prices climbed sufficiently to ensure companies could achieve decent returns. Previously, price increases were often absorbed by rising operational costs. BlackRock maintains a positive long-term outlook for silver, emphasizing its role as an industrial metal, distinct from gold.
Looking ahead to 2026, BlackRock expects returns to be significantly influenced by how company management teams utilize increased cash flows. Prudent allocation, such as substantial dividend increases rather than excessive reinvestment or mergers and acquisitions, will be crucial in differentiating successful silver miners.
