Monday got off to a good start on Wall Street, as major market benchmarks moved higher. As we've seen on several occasions recently, the Nasdaq Composite reasserted its dominance in the current market move higher, soaring more than 2.5% to close at a new record high. More-muted gains for the S&P 500 (SNPINDEX:^SPX) and Dow Jones Industrial Average (DJINDICES:^DJI) reflected more-mixed results from areas outside of technology.

Today's stock market

Index

Percentage Change

Point Change

Dow

+0.03%

+9

S&P 500

+0.84%

+27

Nasdaq Composite

+2.51%

+264

Data source: Yahoo! Finance.

Tech stocks were instrumental in leading the Nasdaq higher, but that wasn't the only area of the market that saw strength. The mining industry hasn't been a huge performer in the recovery from March's bear market, but silver prices have reached their best level in four years. That signals the potential for greater industrial activity. Market participants hope that will translate into a stronger business environment for the entire materials and industrial sectors.

Silver reaches a key level

The price of silver hit nearly $50 per ounce in the early 2010s, but it then went through a massive decline that took prices into the teens for much of the rest of the decade. Silver fell to just $12 per ounce in March as worries about plunging demand for commodities of all kinds weighed on the precious metals markets.

Kilo-sized silver bars engraved with quality markings.

Image source: Getty Images.

Yet silver has bounced back even more aggressively than the stock market in the past four months. Today, silver prices hit $20 per ounce for the first time since 2016. Some market participants pointed to the ratio between silver and gold prices as the reason for the jump. Gold prices have been on the rise on geopolitical fears, especially as the COVID-19 pandemic has heightened tensions internationally. Yet silver was slower to participate in the rally, and only now does it appear that investors are paying closer attention to it.

Silver stocks see gains

Investments that track silver bullion prices saw solid rises in share prices as a result of the strength in the market. iShares Silver Trust (NYSEMKT:SLV) picked up almost 3% on the day, rising to a four-and-a-half-year high. The closed-end fund Sprott Physical Gold and Silver Trust (NYSEMKT:CEF), which holds a combination of precious metals, jumped to its best close since 2013.

Silver mining stocks saw even larger gains on a percentage basis, as their exposure to silver prices tends to be leveraged due to massive investments in their equipment and physical footprints. Endeavour Silver (NYSE:EXK) picked up nearly 15%, while Fortuna Silver Mines (NYSE:FSM) rose 12.5% and Coeur Mining (NYSE:CDE) gained 9%.

Looking ahead, silver gets used in a number of industries, including electronics, photography, and healthcare, in addition to its obvious uses in jewelry and precious metals trading. If the global economy continues to recover, then demand for silver could continue to support higher prices. On the other hand, if economies begin to falter again, then the gains in the metal could easily reverse themselves.

For investors looking for long-term growth, mining stocks don't have the same allure as cutting-edge technology companies. Nevertheless, when commodity markets perform well, they lift the companies that produce those commodities. Investors will want to keep an eye on the metals markets if only to gauge how much a recovery creates new opportunities in the manufacturing and industrial sectors.