In a reaction as unexpected as Trump’s Presidential victory, silver miner Endeavour Silver Corp (NYSE:EXK) fell sharply Friday, extending its post-election losses.
The stock plunged 13.82% Friday to close at $3.74, on volume of 4.11 million shares.
Technically, the stock looks rather negative on the daily chart.
The stock’s ‘three-black-crows’ pattern over the last three trading sessions is highly bearish, even more so because Friday it closed below the 200-day moving average. It is now trading below all three of the 20-day, 50-day and 200-day moving averages.
Endeavour also closed well below the $4.00 level, which has alternated as a support/resistance level over the past few months.
Endeavour is a mid-tier silver mining company focused on the growth of silver production, reserves and resources in Mexico.
Endeavour Silver Corp (NYSE:EXK) washed out with other bullion stocks
Friday was a day to forget for precious metal miners.
Keeping Endeavour company in the losers’ list were First Majestic Silver (-9.07%), Fortuna Silver Mines (-14.20%) and Silver Standard Resources (-13.79%).
Gold and silver have been thrashed following the strength in the US dollar after the Trump win, as well as the rise in Treasury yields because investors sold bonds and headed for stocks.
“The stampede from bonds propelled longer-dated U.S. yields to their highest levels since January with the 30-year yield posting its biggest weekly increase since January 2009,” Reuters said in an article titled “’Trump Thump’ whacks bond market for $1 trillion loss.”
Rising bond yields make gold and silver less attractive to prospective investors, as bullion does not pay any recurring income to its holders.
Comments by a Fed official Friday also reinforced the possibility of a gradual increase in rates at the instance of the Fed.
“In my view, the prospects of a continued steady expansion in the U.S. economy are maximized to the extent that we proceed with a gradual removal of accommodation,” said Fed Vice Chair Stanley Fischer.
Rising interest rates, a strong US dollar and Trump-triggered tax cuts and higher fiscal spending will make for a toxic combination for gold and silver prices.