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« Endeavour Silver Corporation Production Up In 3rd Quarter | Main | Silver Standard Resources Incorporated Worth a Few Calls »

Silver taking a breather

Silver chart 16 Oct 09.JPG

Having flirted briefly with the $18.00/oz level silver is now taking a well earned breather. Although the demand for silver differs from gold the influence of gold is still enormous. However, gold has broken through to record territory and is currently engaged in an inverse battle with the once almighty dollar, so indirectly silver is also a dollar 'play'.

Todays pull back in silver prices can be attributed to the mini rally, if we can call it that, by the dollar. The dollar had dropped down to touch 75.2 before heading north to trade at 75.7, however the rally lacked any meaningful strength and the dollar is now heading down again to trade at 75.4, as we write, on the dollar index, which compares it to a basket of other currencies.

Taking a quick look at the chart of silver prices we can see that over the last twelve months silver has doubled from a low of $9.00/oz to around $18.00/oz. This move by silver has resulted in many of the producers experiencing gains of three and four times their stock price over the same period which hopefully is putting a smile back onto investors faces.

The period ahead will be volatile to say the least so please do not get pushed out of this market by the oscillations of the either the price of silver or your particular favourite silver producers. Movements, both ways will become greater in magnitude and we can expect silver to experience one and two dollar price moves in the not too distant future. The stocks will also experience leveraged moves of an even greater magnitude and some will move more in a day than they were worth not so long ago.

So hang on in there the best is yet to come.

Have a good one.

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