Shares of First Majestic Silver (NYSE: AG) are falling on Monday, down 2.8% as of 3:13 p.m. ET. The move comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 1% and 1.7%, respectively.
The silver miner is seeing its shares decline as silver takes a dive, likely driven by the possible easing of trade tensions between the U.S. and China.
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Trade deal hopes trigger silver sell-off
President Trump today predicted a successful outcome for the upcoming U.S.-China trade negotiations, telling reporters he has "a lot of respect for President Xi" and that he expects both countries will "come away with" a deal -- a sharp contrast to the escalating tensions of recent weeks.
Image source: Getty Images.
Gold and silver prices have been rising amid the latest U.S. and China spat as investors seek a safe haven from the turmoil. A successful deal could send equity prices higher, and capital could flow from metals back to the stock market.
Silver miners face heightened risk as metal prices retreat
I would caution investors from jumping into First Majestic and other silver miners. Its stock is up more than 80% this year as its earnings have exploded. However, this is because of the incredible rise in the price of silver. If silver declines, First Majestic's stock will follow suit, and its decline could be amplified.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.