Canada's biggest precious metals stocks were up an average 5.5% in late afternoon trade on Tuesday led by Endeavour Silver and Silvercorp Metals which both added around 12%. First Majestic Silver was up 9% and Silver Wheaton 6%.
The index with an average market capitalization of US$7.7bn was outperforming a lacklustre broader market with bellwethers Barrick and Goldcorp also making substantial gains. Weak economic news from Europe, lingering concerns about the Greek debt crisis and media reports that China may raise interest rates have lured investors back to precious metals.
Number three Canadian miner Teck Resources up 1.1% was one of the weaker performers as slower economic growth in China would dampen demand for the miner's products – primarily copper and other specialty minerals with only limited output of silver and gold.
Risk appetite has weakened after reports that China could raise interest rates this weekend and that the country could be underestimating the number of bad loans held at local banks.