Last week, silver slowly added around 3% to breaking a run of four weeks consecutive losses and perhaps signalling further upside in the weeks to come. December silver declined $1.01, or 3.2%, to $30.99 an ounce.
The white metal price dropped to a low of around $28.50 during the week, but bounced during Wednesday‘s trading session on a weaker dollar and the general rebound in precious metals.
An analyst‘s report noted that speculative buyers appear to be buying the $30 support level expecting a move higher. Many market observers predict a return to the mid – thirty range in the near – term. Based on the current momentum, volatility and that silver is currently trading close to the top of its current range.
Silver‘s recent volatility has dulled the shine of the white metal and now market players hesitate from using it as a feasible hedge from risk. This has led to a build – up of silver surplus, which may bode ill for the precious metal.
The gold:silver ratio has fallen from its recent high of 54.5 to around 51.7, just shy of the psychologically significant 50.0 level, which soon may be challenged.
Furthermore, Deutsche Bank analyst Adam Sieminski said in a note to clients : “Gold will continue to outperform silver in an environment in which Western world growth is under attack.”
