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Silver Prices Article

Precious Metals

Where Silver Prices Are Trading Today - and What's Next

By , Contributing Writer, Money Morning - • Print | Email

Silver prices today continue to wander aimlessly around the $20-an-ounce level as the white metal is buffeted by many of the same factors restraining the gold price. This drifting comes after a dramatic drop of 35% in the first half 2013.

As with gold, much of the drop is due to fears that the U.S. Federal Reserve will begin "tapering" purchases of bonds from its current $85 billion-a-month level. If this comes to pass, the financial markets currently believe this will reduce excess liquidity and therefore any possible inflationary fires.

Here's what investors watching today's silver price have to understand…

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Precious Metals

Is Now a Good Time to Buy Silver? Rick Rule Weighs In

By , Money Morning - • Print | Email

With silver prices down some 30% year-to-date, is now a good time to buy silver?

We at Money Morning love the buying opportunity being presented in the silver market. With a near zero interest policy in the U.S. likely to stay in place for at least a few more years, and global monetary printing presses continuing to run at full speed, precious metals like silver are once again a lucrative, and now much cheaper, asset.

Rick Rule agrees.

Money Morning recently spoke to Rick Rule, president of Sprott Asset Management and founder of Global Resource Investment Ltd., about silver's decline in 2013 and what investors should do now.

Here's what he said about if now is a good time to buy silver…

Precious Metals

Investing in Silver a Winning Move as India's 'War' on Gold Continues

By , Contributing Writer, Money Morning - • Print | Email

There's a major government move right now that's giving a huge boost to anyone investing in silver…

You see, when things go awry, governments have a tendency to pin the blame away from the government and on a convenient scapegoat.

Take India, for example. It faces a record current account deficit and its currency, the rupee, continues tumbling to record lows against the U.S. dollar.

But it's not government policies that are the culprit here, says the Indian government and central bank. They say the blame lies squarely on Indians' centuries-long love affair with gold.

Gold imports into India hit a record 162 tons in May.

Precious Metals

Why Silver Prices Are Down Today - and What's Next

By , Contributing Writer, Money Morning - • Print | Email

If you're wondering why silver prices are down today (along with most commodities), just look to China.

Silver prices today – along with other commodities – have slumped $0.57, or 2.83%, to $19.55 by midday after tightening credit conditions in China triggered global market sell offs on fears about Chinese economic growth.

The silver price drop follows a rough week for the white metal, which lost 9.07%. Prices managed to claw back over $20 after gaining $0.43 Friday, finishing the volatile week at $20.06.

Since the start of 2013, silver prices have been in a tailspin. The metal has shed nearly 34% year-to-date, making it this year's worst performing commodity.

The precious metal's retreat was pronounced Thursday when silver futures for July delivery slid 8.3% to $19.823 an ounce. In trading after the settlement, silver prices slipped further to $19.56, the lowest level since Sept 3, 2010.

Silver prices today sit a long way off from its 31-year record high of $49.80 an ounce hit in April 2011.

Last week's rout was fueled by comments from Ben Bernanke following Wednesday's FOMC meeting. The Fed chief suggested the U.S. central bank could start tapering its stock and commodity markets supportive stimulus program later this year.

Further weighing on silver were reports out of China showing the Asian nation's economy is facing a slowdown.

Spooked investors fled equities and precious metals in droves.

"Silver is quite speculative, it's quite volatile, so a little less money is going into silver," Tony Coleman, managing director of New Zealand Gold Merchants, one of the country's largest precious metal refiners and bullion dealers, told NZ Business News. "But they [investors] want to have a bit of a play and silver is the one you can really make some money on because of movements in price."

Indeed, that's because of silver's high beta. That means it has wider price swings than other metals in both bull and bear markets. While those wild moves scare some investors, they offer huge gains for those who stick with silver.

While silver often trades in tandem with gold, its movements are often more extreme. That's why precious metal experts like Money Morning's Resource Specialist Peter Krauth like to best describe silver as "gold on steroids."

Precious Metals

The Best "Bargain" Silver Mining Stocks to Buy Now

By , Special Situation Strategist, Money Morning - • Print | Email

Precious metals related stocks have been under selling pressure all year, but smart investors are having a field day scooping up some of these best "bargain" silver stocks to buy right now.

Companies that mine gold and silver have seen their stock prices punished as the metals' prices have declined. So far this year gold is down 18% while silver prices have been punished even more severely, falling 28%.

The metals had experienced a multiyear strong run as fears of contrary instability and potential inflation drove investors into metals and miners alike. As the economy has shown signs of stabilizing and inflation concerns remain subdued, the rally has stalled.

The mining stocks have been hit even harder as marginal capacity became too expensive to maintain and profits fell sharply.

Now we appear to have reached an unsustainable condition in the price of silver mining stocks.

The total cost of producing an ounce of silver is estimated by some analysts to be as high as $24 an ounce. When this happens marginal capacity is forced out of the market place as higher cost mines are simply shuttered rather than run at a loss. Plans for expansion or exploration are delayed or eliminated and the level of production decreases.

We are seeing this in silver right now.

Precious Metals

Why Silver Prices Fell Today then Recovered in Wild Trading

By , Contributing Writer, Money Morning - • Print | Email

If you're wondering why silver prices fell sharply Monday, it looks like the answers lie in Asia.

Silver prices staged a sharp recovery Monday after volatile trading that took the white metal tumbling 9% in 10 minutes to $20.25 an ounce, a level not seen since 2010.

The steep selloff followed a spike in the Japanese yen against the dollar. Precious metals traders surmise investors were forced to sell silver to cover losses in the currency market. The result was a rash of automated sell orders.

Indeed, the effect has so extreme and rapid, the Chicago Mercantile Exchange halted silver futures trading four times to restrain volatility and rein in excessive price movements, a move known as Stop Logic. Because volumes for silver are lower than for gold, they are more prone to sharp swings, up and down.

Data shows more than 3,000 contracts in Comex silver futures sold in just 20 minutes during early Asian trading. Standard Bank in Tokyo confirmed an unidentified investor sold a sizable position of silver Monday morning.

"The drastic move lower happened pretty much after the CME's electronic platform Globex opening," Afshin Nabvi, MKS head of trading told Reuters.

"The move was exacerbated by the fact that it happened when liquidity was very thin in Asian trade," he continued. "If the same happened in London or New York hours, the size of the liquidation might have been cushioned by higher volumes."

Investing Tips

The Shipping Industry Begins its Lucrative Recovery

By , Money Morning - • Print | Email

Billionaire investor Wilbur Ross earlier this month once again suggested that the shipping industry is ripe for investment, presenting a handful of good stocks to buy now.

Ross knows how to spot a beaten-down sector and turn its brightest opportunities into mega-profits. This "vulture investor" previously invested in troubled sectors like coal, steel, and auto parts and cashed out years later with enormous gains.

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