A strong US dollar did not hamper silver prices on the day. Silver and gold prices are benefiting from the political tensions with Iran that are driving up the price of oil. Silver and gold are once again acting as a risk asset as sustained high oil prices increase the likelihood of a recession.
While prices for silver traded fairly flat today the big news came from statements made by Fed Chair Ben Bernanke at the Federal Open Market Committee. The Fed lowered prospects for US economic growth and hinted that another round of stimulus measures is not off the table. Prospects of QE3 have stoked the flames of silver bulls.
The tumultuous global economic climates have been weighing down on the price of silver.
Silver’s ability to efficiently conduct electrical and thermal energy makes it a key raw material in solar energy applications. Recent reports show that the future of silver demand may be in part tied to the development and growth of the clean tech and renewable energy markets.
As investors look for save havens in precious metals amidst fears of currency inflation across the globe, a bullish outlook is projected for silver as a more affordable alternative to gold, though some analysts warn that even if they have been following similar recent price trends, the two metals should be viewed as unique and separate assets.
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.
Fall is often a time for active trading. This, combined with insecurities over global currencies, is preparing metals traders for a rush to silver.
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.
A combination of uncertainty in the global economy, political unrest in the Middle East and North Africa, limited supplies and a growing demand from emerging markets could poise silver prices to break out to new highs. China, in particular, has been showing a large appetite for investing in both silver and gold.
Silver is feeling the pressure from both the precious metals sector, with gold dropping to its lowest close in three months, and the industrial sector as investors worry that the economic recovery is stalling.
Friday, January 6, 2012