The Adriatic Metals Plc (ASX: ADT) share price has finished Tuesday's session in the green and closed the day 3.5% higher at $3.31.
That caps off an impressive gain for the precious and base metals explorer, whose share price has climbed 11% in the last month.
Adriatic Metals has scored these gains despite there being no market sensitive information for the company.
So let's dive in and take a look at what's fuelling the price action.
Why is the Adriatic Metals share price gaining ground lately?
Adriatic Metals is a producer of precious and base metals such as zinc, lead and silver. It has keen interests in several projects dotted across Bosnia and Serbia involved in each metal.
In the absence of any remarkable news that may directly impact its share price, we have to look to the underlying commodity markets to help understand what's driving the Adriatic share price lately.
That's because Adriatic Metals is in a fairly secular position, in that like its peers, it is an ASX resource share that produces commodities. As such, its share price will fluctuate as the price of its underlying commodities fluctuates.
Two of the base metals the company has exposure to – zinc and lead – have had price spikes in the last few weeks.
For instance, the price of zinc has crept up from a previous low of US$3,013/Tonne on 6 October to reach a high of US$3,222/tonne yesterday. That's a 3-year high for the metal.
Lead has also crept up 7.5% in the last few weeks to trade at US$2,279/tonne, reversing a downward trend that had been in situ since mid-August.
With this in mind, it appears that bullish investors may have grabbed ahold of Adriatic Metals shares on the back of the recent momentum in the broader commodities markets.
And it also appears the strengths are carried through the broader sector, with the S&P/ASX 300 Metals and Mining Index (XMM) gaining almost 4% in the past week as well.
Hence, Adriatic shares could be riding the wave of a stronger underlying commodities market and buying strengths across the broader ASX metals sector.
Adriatic Metals share price snapshot
The Adriatic Metals share price has climbed 42% this year to date and has extended its gains over the last 12 months to 47%.
Each of these returns has outpaced the S&P/ASX 200 index (ASX: XJO)'s return of around 25% in the last year.
