Silver Market Update (3-29-2015)

Silver’s rise the week before last raised hopes of a further recovery last week and, we’re happy to say, that’s exactly what happened. The price climbed slowly most of the week before spiking dramatically on Thursday, reaching $17.35 during morning trading in Europe. Unfortunately it lost some ground when the US markets opened and closed the week at $16.97, but that’s still a 20 cent gain on its previous close. Modest as the week’s rise was it’s still significant, and leaves silver heading the right direction for the second week in a row. Thursday’s high also shows there’s no anxiety about buying at well above $17, so hopefully we’ll see that barrier broken this week.
For the past few weeks we’ve been seeing silver and some of the other precious metals tracking the equities market closely – or possibly it’s the other way around – which is pretty unusual. Many analysts put that down to the current turmoil in the currency exchanges, with the Euro’s dramatic meltdown provoking a frenzy of FOREX trading. This week, however, the traditional relationship reasserted itself. The Dow Jones fell most of the week, and precious metals rose through that time. When the Dow showed a slight recovery on Friday silver – and gold – slipped back slightly. Equities fell on most of the major markets, with the UK’s FTSE 100 dropping through the whole period. There’s been so much volatility recently that it would take a brave analyst to say that pattern will hold from now on – or even just this week – but at least we have evidence that it’s not completely broken.
Assuming the usual link is going to hold for a while, we can make some educated guesses about where silver is going to go over the next few weeks. The Eurozone crisis is starting to look never-ending, and as Germany’s already frayed patience heads for breaking point there’s still a very real chance that Greece will be ejected from the Euro. That’s likely to lead to an immediate rise in the single currency, which would be a boost for exporters in the USA; share prices would rise rapidly, and silver would probably be driven down. On the other hand if Greece stays in the Euro will remain weak, with some market watchers predicting it could hit dollar parity or below by the end of the year. In that case it’s more likely we’ll see more falls in the Dow and a much healthier outlook for silver.
Silver isn’t facing much competition from oil just now, with crude prices still apparently stuck in a fairly narrow band. West Texas Intermediate barely moved last week, and is still around the $48 mark; Brent slipped slightly to $56. With so little movement there isn’t much money to be made in oil, which again boosts silver.
Overall last week has us feeling cautiously optimistic, with Thursday’s high looking especially good. If silver can manage a few more weeks like that we should see prices well clear of $17, so this looks like being a good time to stock up before prices rise further.