In the few past weeks silver have stepped back significantly on various reasons iShares Silver Trust – the most popular ETF that track this metal traded around $27.80 per ounce in respect. However, there was some rebound pushing the metal up at the start of this week.
Silver future contract for delivery in March gained 28 cents to trade at $28.72 per ounce.
Also the ETFs gained as the metals stabilized, at least for now. Analysts have been expecting a higher rebound after the large downside moves. The higher inch of the metal was brought by the Comex gold futures developments, which saw some gains last Thursday and Friday. The gains transferred into this week strengthening the gold/silver ratio driver.
The white metal is a commodity which correlates other precious metals. Yet, silver is also used for industrial purposes in contrast of gold. Recently demand for silver has increased for investment purposes rather than to industrial usage. Once again investors have started buying silver-backed exchange-traded funds and physical silver for investment purposes.
The net implied investments are to be growing significantly considering the global physical demand and supply scenario. In 2012 the implied investments was around 231 tons. A year earlier the investment sat at 152.2 tons. The rebound was largely due to several events such as quantitative easing, fiscal cliff etc. For 2013 we can expect the line up of several events that have similarity.
Yet the expected rebound in silver prices was barred last week. Market players were still uneasy from Fed’s FOMC minutes from early January release. The data pointed out that the US economy is improving its conditions. Also officials hinted that the massive quantitative easing policies are to be changed sooner that expected. The Fed is very likely to consider an asset purchasing reduction or even end.
Technical indications for silver are not as bullish as those for gold. Though, they are now firmly positive that the metal is likely to aim higher in near future. Probably it will take some time for the sentiment to recover from latest sharp drop. After that a significant rally is very possible. Therefore projections see some filling and backing before a sustainable jump.
