Silver Investing News spoke with Jason Goulden, V.P. of Research at Metals Economics Group, and with Michael DiRienzo, Executive Director of The Silver Institute, about the factors currently playing a role in the silver market.
Silver prices fell on Tuesday for the first time in four trading sessions, yet global economic factors support silver going forward. Silver investing News spoke with Jamie Greenough, Investment Advisor with Global Securities Corp. about the silver market and recent price movements.
China has been heralded as the global economic savior who will push worldwide commodities markets higher and higher, but markets guru A. Gary Schilling recently warned that China is on the verge of a “hard landing” that could “prick the global commodity bubble,” sending oil and industrial metals markets like copper and yes, even silver, on a downward spiral.
William Rhind Managing Director of ETF Securities speaks about the current trends of the silver market and the strength of ETF’s despite the correction of silvers price.
Precious metals have enjoyed a spectacular rise today after the Federal Reserve signaled that interest rates will stay low for an extended period of time, no changes to policies or forecasts and telegraphed the end of its bond-buying program.
Silver made moderate gains today, regaining some of the ground lost on Tuesday after the pull back from the $41.37 per ounce high. The price of silver is mostly driven by continuing factors of loose monetary policy and inflationary fears. Concern is mounting in the market that precious metals are over valuated and are set to fall.
Silver’s impressive rally over the last five weeks is no doubt a reflection of investor demand for safe haven assets in times of political and economic uncertainty. Many analysts are still bullish in the medium to long-term, but advise investors to stay cautious in the short-term and heed silver’s seasonal cycle, warning of an upcoming pullback in precious metals prices.
The dramatic surge in the silver price since the start of political unrest in the Middle East could be tied to the rise in oil futures, and inflationary fears. Oil closed in New York at over $100 a barrel, and many economists, including Fed Chair Ben Bernanke warn that the rise in oil price may cause a rise in the Consumer Price Index.
The biggest story in the silver market is not the price gains, but rather a condition of backwardation in the silver futures market. Ted Butler discusses the significance along with silver price manipulation.
A major factor influencing rising investment demand in precious metals often referenced by analysts is the quantitative easing measures employed by The Federal Reserve in an attempt to bolster the US economy. One of the effects of the Fed’s paper-printing policies is the debasing of the US dollar, which makes gold and silver attractive safe-haven buys. A reversal in that policy could have a dire impact on silver prices.
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