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Actionable news in SLW: SILVER WHEATON CORP,

Is Gold Taking A Bigger Role In Moving Silver Wheaton?

The correlation between the company's stock and silver has weakened, while the correlation to gold strengthened. Will this trend persist?

The expected fall in both gold and silver could keep pressuring down SLW.

The company will have to decide how to finance its future growth.

The silver market is expected to take another hit this week if the FOMC moves forward and raise rates. This development is also likely to adversely impact Silver Wheaton (NYSE:SLW), the Canadian silver and gold streaming company, even though its shares rallied in the past few months. Let's review the relation of Silver Wheaton's stock with gold and silver prices. Also, how the company plans to finance its future streaming contracts could also impact the stock.

The chart below shows the development of silver and shares of Silver Wheaton over the past six months.

Source: Bloomberg and Google Finance

As you can see, the major fall of SLW compared to silver was back in the middle of the year. Also, the plunge in silver prices didn't seem to substantially drag down SLW.

The outlook of silver and gold

The two main factors likely to move SLW are, no surprise here, silver and gold. In general, the price of silver tended to be more strongly correlated to the stock price...


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