Despite predictions of the silver market’s strength, prices fell from an impressive 30 year high of $30.68 recently. As of the today, COMEX silver futures have fallen about 7% from their recent peak
Likewise, the silver ETF experienced a similar fall in higher volume. From its intraday high of $30.00, it has fallen below $28.00 on higher volume.
It seems like, for the moment at least, silver prices are falling. Will they rise again? And why?
Strong Holdings vs. Falling Prices
In reality, the news is conflicting. After all iShares Silver Trust is the world’s largest silver backed exchanged traded fund and it has just reported reaching an impressive record. On the 7th, it announced that holdings had reached a record 10,941.34 tons, up from 10,816.69 tons on the 6th.
The question is: has silver regained its strength? Is the market simply correcting? Or are we about to experience a major collapse in silver prices despite expert predictions of strength and growth? In any case, how should investors respond to its new movements?
Silver Shortage?
In the end, the best thing investors can do to protect themselves is to simply be careful. Its important to be mindful of the many pressures that the market is under, as well as the predictions of its potential long-term growth. Silver has been sold past the point of availability and as a result significant shortages of the physical metal are developing.
This is in part due to attempts at manipulation that have recently begun to turn on the manipulators. Companies that have traded silver futures in an effort to keep prices low are now being stressed by the rising investor interest in silver. As a result it seems clear that the short-term silver market is about to get truly exciting.
The price movements certainly are getting interesting.
The takedowns from bankers are occuring less often, but with more force.
The recent run has produced a very nice squeeze, which should not be over yet.