NEW YORK (TheStreet) -- Silver prices have gained 7% during the past three months. This compares to a 3.5% drop in S&P 500 index. This up move in silver prices has had a positive impact on silver miners.Two such silver stocks, Silver Wheaton ( SLW) and Pan American Silver ( PAAS - Get Report), have outperformed both the S&P 500 and the precious metal during the last three months. Both Silver Wheaton and Pan American Silver have gained 23.6% and 12.9%, respectively, during the past three months. We hold a bullish view on the outlook of silver prices and the growth prospects of these companies. With the ongoing uncertainty in Europe, coupled with a lack of direction in the equity markets, we reckon that investors will look to park their money in safe havens like silver. This trend has been reflected in the exchange-traded funds, which have witnessed an uptick in activity. During the last three months, silver holdings in iShares Silver Trust ( SLV - Get Report), the largest ETF backed by silver, have declined by 2%, to 9,258 metric tonnes. Meanwhile, the ETF has gained 6% during this period. According to GFMS, London-based metals consultancy, both industrial and investment demand would witness a double-digit growth this year, boding well for silver prices. The consultancy said that total investment in silver was up by 184% year-over-year to 136.9 million ounces during 2009. Industrial demand, which declined 20.5% year-over-year during 2009, is also expected to improve, as there has been very little restocking done by companies, despite a recovery in the global economy.
Going forward, the company forecasts total production of 23.5 million silver equivalent ounces during 2010, representing a year-over-year increase of 35%. This number is expected to go up to 40 million by 2013. On June 1, JPMorgan rated the stock an overweight with a price target of $23, implying a 20% upside over current levels.