Silver Market Update (4-26-2015)

Silver had been looking slightly healthier until early April, but the last couple of weeks have been unsettled. With confidence still fragile that could have gone either way and last week we found out which – down. From a healthy-looking opening at $16.33 it dropped sharply as soon as the markets opened on Monday, losing over 40 cents in three days. Thursday saw a small rally of around 12 cents but then on Friday the slump resumed. The final price was just $15.755 per ounce, very close to a 30-day low and 50 cents below where it was the Friday before.
The silver spot price has pretty much rebuilt its link with gold over the last few weeks, so it wasn’t really a surprise to see it tracking the other metal. It also wasn’t surprising to see both mirroring the movements of the major equities indexes. The Dow Jones and FTSE 100 both dipped at the start of the week, prompting silver to jump five cents as soon as the markets opened, but share prices quickly recovered and rose fairly steadily for the rest of the period. That pushed metal prices down apart from Thursday, when silver and gold both managed to rise briefly before going into reverse once more.
Silver looked to have uncoupled itself from equities for a while but the conventional wisdom now seems to be back in effect. That means for the immediate future we should look for silver to fall on anything that boosts share prices, and vice versa. At the moment the stock market is quite volatile; there’s uncertainty over what the Fed is planning to do with interest rates, added to the continuing crisis in Europe. With Greece still in the Eurozone – for the moment, at least – the single currency is being weighed down by the ailing country’s massive debt problems. That means a strong dollar, which is bad news for American manufacturers hoping to export. At the same time there isn’t much fluctuation in the exchange rates; the Euro has been moving in a band about three cents wide for weeks, and that doesn’t create many opportunities to profit from currency trading.
Meanwhile the signs of life that finally appeared last week in the oil market are still with us; West Texas crude finished last week at $57.15, while Brent reached $65.28 – that’s the healthiest either has looked for months. There’s some doubt about whether that’s likely to be a sustainable trend but for the moment some enthusiasm is returning to the sector.
Overall it looks like silver is relatively weak right now, which is a disappointment after the better performance we saw in late March and early April; there’s also a softening in silver futures, which were down 0.04% for July. That suggests confidence is flagging again after looking like it was returning, and if investors aren’t confident the price is likely to slide further before it recovers. Unless you bought your stocks a while back, when the price was a lot lower, it’s probably not worth selling right now, but if you’re looking at buying metals gold is probably a better bet right now.