Silver price is down 13% this week, but that’s what silver is doing – analysts


Editor’s Note: Get swept away in minutes by our quick roundup of today’s must-see news and expert opinions that have rocked precious metals and financial markets. Register here!

(Kitco News) – As a storm of selling pressure hit gold, a hurricane collided with silver, with prices down 13% so far this week. The precious metal is having its worst week since its massive sell-off in 2011.

“Money does what money does, which frustrates investors,” said Ole Hansen, head of commodities strategy at Saxo Bank.

Hansen said while there are a number of factors currently playing against silver, the main driver has been the rally in the US Dollar. The US dollar index hit a nearly 2-month high above 94 points.

“The US dollar continues to see short hedges and all commodities are hurting,” he said.

Hansen said silver could drop further and he is watching initial support at $22.90 an ounce.

Robin Bhar, an independent commodity analyst, said the US dollar was a major driver of recent silver weakness. He also added that it’s no surprise to see silver lower as gold is down around 2% this week as prices fell through critical support at $1,900 an ounce. .

“Where gold goes, silver follows,” he said. “Because silver is much more volatile than gold, it has more leeway.”

Bhar said the precious metals market was struggling as Congress continued to “bicker” over further fiscal stimulus. He added that it now seems unlikely that the government will pass any major bailouts before the US presidential and general elections in November.

Bhar added that the lack of further stimulus is impacting industrial demand for silver, which accounts for around 50% of demand for the precious metal.

Although silver saw a massive sell-off, Bhar and Hansen said the decline should be taken against the backdrop of its recent rally.

From late March to early August, silver prices nearly doubled, topping $30.00 an ounce and its highest level since 2013.

“The money is down but I wouldn’t be too concerned about that down,” Bhar said.

Hansen said he remains bullish on gold over the long term and expects that to support the silver market. He added that he did not see the gold/silver ratio going well above 80 points in the short term.

On Wednesday, the ratio was trading at 78 points, up from its recent low of 69 points.

Bhar said that although he is more bullish on gold as uncertainty dominates financial markets, he sees potential for silver.

“I would view these low silver prices as long-term buying opportunities,” he said. “I don’t think you want to try and catch a falling knife right now, but maybe consider buying if prices drop to $20 an ounce.”

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

Source link


Comments are closed.