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Metals and Mining: Winners and Losers

NEW YORK (TheStreet) -- Endeavour Silver (EXK), MAG Silver (MVG) and Pan American Silver (PAAS) rallied higher; Peabody Energy (BTU), James River Coal (JRCC) and Alpha Natural Resources (ANR) showed weakness.

Silver stocks accumulated gains past week as global silver prices tested 38-year highs, attributable to higher consumption. Looking ahead, London-based consultancy firm GFMS expects silver prices to touch $50 per ounce in 2011, as demand from investors seeking a safe haven and inflation hedge will push prices higher.

Leading the advancers' list, Endeavour Silver gained 26.9% last week. For the first quarter of 2011, the company reported record 17% increase in silver production to 900,133 ounces, while gold output escalated 33% to 5,008 ounces, compared to the first quarter of 2010. Led by higher production and realized prices, revenues surged 95% to 35.4 million. The company has also reaffirmed that it is on track to achieve its production forecast of 3.7 million ounces silver in 2011.

MAG Silver and Pan American Silver accumulated 22.7% and 15.5% during the past week, respectively, led by higher underlying metal prices. A major portion of the rise in silver prices is attributed to investment demand vis-à-vis industrial demand. This trend is expected to continue, with the probability of lasting through the next decade.

Last week, as silver prices breached the $40 an ounce record price, others silver stocks like Silver Standard Resources (SSRI) and Silver Wheaton (SLW) edged 9.8% and 9.5% higher, respectively. Many research firms have recommended SLW and analysts have assigned a near-term target of $54 with an outlook of outperforming the sector.

Among others, Metalline Mining (MMG) and Mines Management (MGN) were up 13% and 11.6%, respectively.

As the dollar index slipped to a 15-month low, gold prices soared to record highs of around $1,460 an ounce. As per a Standard Chartered analyst's report, gold prices are seen averaging around $2,100 an ounce by 2014 and even approaching $5,000 later in the decade, driven by robust demand from Asian economies.

Gold stocks like Eldorado Gold (EGO), Alexco Resource (AXU), Goldcorp (GG) and U.S. Gold (UXG) rose 13.6%, 11.5%, 10.6% and 9.5%, respectively.

Great Northern Iron Ore Properties (GNI) emerged top loser last week, down 16.7%. Crude oil supply increased by almost two million barrels last week. Peabody Energy and Massey Energy slipped 6.3% and 3.8% during the last week, respectively, affected by higher-than-expected increase in supply. Positively, analysts at Morgan Stanley raised the price target for Peabody to $80 from $79 with an overweight rating.

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