Silver suffered a sharp setback in early trading Monday as the market reacted to the Bank of Japan’s move to devalue the yen. Investors and traders will be monitoring the actions of other central banks, such as China which many anticipate will loosen its monetary policy by the end of the year.
Prices for commodities such as crude oil and copper have been hit by fears that demand may suffer due to the ongoing European debt crisis and signs of economic slowdown in Asia; with the majority of demand for silver coming from the industrial sector it’s hard for the white metal not to get caught up in concerns of slowing global economic growth.
The price of silver has advanced nearly $10 an ounce in the last three months, pushing up share prices for several silver mining stocks.
Long-time silver investors are well aware that this isn’t the best time of year for precious metals as gold and silver prices trade sideways to lower, hitting bottoms by mid-August. Despite the depressing name, the summer doldrums do offer a ray of sunshine.
Fearing the rise of inflation due to the reluctance of central banks to change historically low interest rates, investors are looking to silver. This practical guide shows newbie investors how to enter the silver market in all forms, either in bullion, ETFs, futures contracts, or through direct investment in mining companies.
While the contagion of fear in the markets is providing silver with a much needed boost this week, ongoing economic problems around the world will eventually weigh on industrial demand.
The news story getting the most attention (and causing the most hand-wringing) this week is evidence China’s economy is cooling after the nation posted a growth rate of 11.9 percent in the first quarter of 2010.
While the price of silver followed gold up and up this month, teasing analysts and investors with hopes of breaking past $20 an ounce, the sometimes precious sometimes industrial metal fell hard the past two days.
The European (and in fact, the global) financial crisis is far from over and will continue to influence the precious metals (and industrial sector) for some time to come. Whether silver will react positively or negatively over the long-run still remains to be seen.
When ETFs were first introduced to the marketplace a decade ago, they opened up a whole new world of investment opportunities. Now New York-based Global X Funds has extended those opportunities even further. Tuesday, Global X launched the world’s first silver miner exchange-traded fund, Global X Silver Miners ETF (SIL).
Tuesday, November 1, 2011