What happened 

Precious-metals companies were on the rise today, with the stock prices of Fortuna Silver Mines (FSM 7.38%), Harmony Gold (HMY 4.03%)Sibanye Stillwater (NYSE: SBSW), Coeur Mining (CDE 4.63%), and Hecla Mining (HL 4.80%) all rising more than 10%. Here's how their stocks all closed.

Company Stock Price Increase
Fortuna Silver Mines  11.3%
Harmony Gold  14.1%
Sibanye Stillwater 22.3%
Coeur Mining 11.5%
Hecla Mining  11.0%

Data source: Google Finance.

None of these companies has put out any press releases, and there were no upgrades or downgrades on stocks or debt ratings, so of today's gains can probably be chalked up to the one-two punch of rising broader markets and higher precious-metals prices. 

So what

Today's overall stock price rise seems to be coming from some good news related to the fight against the novel coronavirus. Reports from Europe noted that new cases in Italy are slowing, and Spain reported a decline in the rate of new infections deaths over the weekend. What's more, New York has reported that the rate of new cases is starting to level off. This is a smattering of news headlines that suggest we're starting to make some headway against the pandemic. 

A gold mine

Image source: Getty Images.

The other catalyst that has these companies moving is the increasing prices of precious metals, notably silver and gold. The price of gold rose nearly 4% to just under $1,700 per Troy ounce, and silver was up nearly 5% to $15.23 per Troy ounce. While all of the companies mentioned here have some interest in other metals, the bulk of their business is in at least one of these two metals. So whenever the price of gold increases, Harmony Gold and Sibanye Stillwater are likely to see share prices rise, whereas we're just as likely to see shares jump at Fortuna, Coeur, and Hecla if there's a jump in silver prices. 

What's causing gold and silver prices to rise is probably the higher economic uncertainty in the coming months. While there is good news about the health crisis, we're still trying to figure out the economic repercussions and the ripple effects it's likely to create. Whenever there are times of uncertainty, there's a rush into precious metals. 

Now what

Anyone looking at today's share-price spikes needs to keep something else in mind as well. These stocks can go down just as easily as they went up. Higher precious-metal prices would suggest worsening economic times ahead, whereas the same movement in stocks suggests the opposite. So it's hard to create a single narrative that puts both of these moves at the same time into context.

What's also not considered in these price moves is what might happen with these businesses during the shutdown. Sure, Sibanye Stillwater and Harmony Gold both are precious-metals miners, but the majority of their operations are in South Africa, which started a three-week national lockdown on March 23, with mine operations suspended. Similarly, Fortuna's mine in Mexico and its development project in Argentina have been shuttered, while Hecla's Casa Berardi mine in Quebec is closed. So even though the price for precious metals has gone up, these companies will have less and less of those metals to sell in the coming months.

The argument could be made that the shuttering of several mines globally to combat the spread of COVID-19 could be a catalyst for precious-metals prices for some time. With fewer and fewer mines in operation and no definite date for coming back online, it's possible we could see prices rise further and make this sector that much more lucrative once operations are back up and running.

The downside is that there aren't a lot of mining companies that can withstand prolonged shutdowns. A company's quick ratio is a metric that measures the amount of assets -- cash on hand, short-term investments, and accounts receivable -- over total current liabilities. A measure over 1 means more liquid assets than liabilities. With the exception of Fortuna, these companies don't have a lot of current assets it can use to keep the lights on.

FSM Quick Ratio (Quarterly) Chart

FSM Quick Ratio (Quarterly) data by YCharts

Typically, times of economic strain and uncertainty make precious-metals stocks an attractive alternative, but with few of these companies able to produce, it's hard to say what will happen with these smaller mining companies in the coming months. It's probably best to either look at other options in precious metals or maybe just sit this rally out.