The latest economic numbers out of China show that high growth is continuing, along with a high rate of inflation. That number recently hit a 32 month high, according to Reuters. Both growth and inflation are up 9.7%, according to the latest numbers just released.
Given the propensity of Chinese retail investors to place a substantial portion of their investments into precious metals, the inflation numbers could help drive Silvercorp Metals Inc. (NYSE:SVM) higher.
Silvercorp is a Canadian-based silver miner with four silver/lead/zinc mines in the Guangdong Province. According to the company's website, it is China's largest primary silver producer, as well as its lowest cost producer for the last five years. I suspect that the run up in base metals plays a part in the the fact that Silvercorp has been able to produce silver at a NEGATIVE cash cost of $7.13/oz.
Given the current volatility in silver, compounded with the intrinsic volatility of miners, taking a position in SVM is not for the faint of heart, but for investors with an appetite for risk, SVM provides an interesting opportunity for profit. It even pays a small dividend!
Disclosure: Currently long SVM, but have been trading in and out, tactically.