Last week silver closed the month at $31.973 per ounce. The precious metal saw strong price volatility in January. Though, the period prices hit a high of $32.478 and low of $29.24 per ounce. This rally was strange considering the rising demand from the industry and other sectors. All industrial metals enjoy stronger demand in recent months, with zinc advancing at most.
Back in December, the white metal demonstrated lower performance. This was on the back of the US economic health threatened by the fiscal cliff scenario. Through the past month there were a lot of developments. Silver got a good gain in January. The US tax increases had been put on the table. The legislators have met an agreement on the fiscal cliff deal. Though, nothing much had done for the spending cuts. The issue has been delayed for more two months. If development is seen in February, silver prices will find additional support on the way up.
In China, the macro-economic scenario improved. In January the country reported a rebound in its manufacturing activity. This provided a short-term support for silver bulls. The recent Chinese macroeconomic data indicates that the Chinese manufacturing sector continues to expand. It is most certain that in February the manufacturing numbers will continue to grow. In unison, silver demand will keep rising. In respect the market will become moderately bullish.
Over the last month silver was as usual, very volatile. However, altogether silver performed better as an industrial metal rather than precious one.
It is very much likely that silver will move to the upside in February.
There are several reasons to support this outlook. The third phase of quantitative easing in the U.S. could start to pressure up bullion prices. The deadline of the debt ceiling debate is postponed to May. Though, the US policymakers are likely to support the silver backdrop in February. In addition, more growth reports for housing, labor and manufacturing sectors are possible. That could boost the US economy and in respect silver bullion rates. If there is some sort of turmoil on the global stock markets, investors will once again turn to precious metals as save haven. Last but not least, traders should pay attention to currencies. It is very likely that the Aussie dollar and the Euro would strengthen even more against the US dollar. If so, silver could gain further benefits through the month.
Silver prices make no sense whatsoever. Going by the so-called fundamentals silver should be at at least a hundred bucks. The price of silver is being artificially manipulated somehow. I bought 1 Krugerrand @ 1500 which is worth almost 1700 now. The very same day I bought a whole lot of junk silver and it has dropped in value by 25% in the same time my gold went up about 15%. Let’s hear some glib “explanation” for that. For YEARS I’ve been hearing and reading how “silver outperforms gold.” ABSURD! Silver is STAGNANT. If it EVER gets me to the breakeven point (doubt I’ll live that long) I’m going to dump it like the “junk” that it truly is. Doesn’t matter how rare it is, how in demand it is, how much of it is used and unrecovered by industry none of that affects the price one iota–it just SUCKS as any kind of investment.
Hey, I know where you are coming from…but silver price manipulation in the long run doesn’t make sense. If the price jumps in a day over $50 or something like that, it is obvious…
Any way, follow the BIG guys and if you see a quick spike, jump on the wagon and dump your silver 🙂