On Wednesday, precious metals initially gave back some of their sizable gains from yesterday before recovering after the Federal Reserve released the minutes of its latest meeting. Despite the bounce, silver continued to underperform the rest of the precious-metals complex. TheĀ iShares Silver Trust (NYSEMKT:SLV), down more than 0.5% today, has badly lagged the SPDR Gold Trust (NYSEMKT:GLD) and the gold market. Let's take a look at what's behind the iShares Silver Trust's underperformance and why it didn't stopĀ Hecla Mining (NYSE:HL) from posting big gains.

Why is silver lagging gold?
Today isn't the first time that silver has fallen more than gold. Over the past six weeks, the iShares Silver Trust has performed horribly even as SPDR Gold Trust has mostly held its own:

SLV Chart

iShares Silver data by YCharts.

One reason for the disparity in performance stems from the fact that gold and silver have different sources of demand. For the most part, gold's biggest uses are for investment and jewelry, with the metal also filling a specific need as a monetary reserve asset. Silver, on the other hand, has considerable value as an industrial asset, so signs of reduced demand from industrial users can push the iShares Silver Trust and other silver-tracking investments down even when other factors are positively helping gold.

Another thing weighing in gold's favor lately has been that lower prices make the yellow metal more affordable. When the SPDR Gold Trust was hitting its peaks, many would-be buyers started to shift demand toward cheaper silver, and jewelry retailers offered more silver-made items in order to sustain their margins. As gold has fallen in price, though, it's become more attractive to buyers, which in some cases has come at silver's expense.

Hl

Hecla's San Juan Silver project. Photo: Hecla Mining.


Hecla beats its peers
In the mining arena, Hecla Mining soared almost 5% after the company reported preliminary production numbers for the first quarter. Silver production rose 32% from the year-ago quarter with Hecla Mining seeing gold production soar 238% from the first quarter of 2013. The reopening of the Lucky Friday mine was a huge boost for Hecla Mining, as its production reached almost 700,000 silver ounces compared to just 120,000 ounces last year. Most of the boost in gold production came from its Casa Berardi property, which produced more than 31,000 gold ounces in the quarter.

Hecla Mining also has further growth in its pipeline, with its No. 4 Shaft at Lucky Friday expected to open by mid-to-late 2016. Meanwhile, Hecla continues to deepen its West Mine Shaft at Casa Berardi, which could reduce operating costs and set the stage for further exploration. If those moves pan out, today's gain could be just the beginning for Hecla Mining.

How metals moved today
May silver futures settled down $0.29 per ounce to $19.77, with futures markets settling before the Fed's minutes release. June gold futures settled down $3.20 per ounce to $1,305.90, but spot gold pushed into positive territory after the central bank's announcement.

Metal

Today's Spot Price and Change From Previous Day

Gold

$1,312, up $4

Silver

$19.89, down $0.17

Platinum

$1,438, up $3

Palladium

$779, up $5

Source: Kitco. As of 4:30 p.m. EDT.

Looking forward, it'll be interesting to see if the Federal Reserve has any lasting effect on the market. In all likelihood, geopolitical and sector-fundamental issues will have more of an impact. But if the economy starts to press forward more strongly, silver could finally reverse course and start outperforming gold again.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.