Silver's Disappointing Results Surprise This Analyst, Here Is Why
Thursday, October 26, 2017 at 06:54PM
Silver Prices

(Kitco News) - Silver’s performance has been somewhat of a letdown for traders and one silver bull says he is forced to “temper” his outlook on the metal.

“Significant [speculative] buying pressure is offset by physical selling. I am forced to temper my bullish conviction in SLV, expecting only moderate upward pressure in the remainder of the year,” Boris Mikanikrezai, precious metals analyst at FastMarkets, wrote in a Seeking Alpha post on Wednesday.

Silver prices fell even further Thursday, touching a three-week low, after the European Central Bank’s (ECB) decision to start trimming its monthly bond-buying program beginning in January. 

ECB’s monthly bond buying has been set at pace of 60 billion euros and that will continue until December, according to the bank’s statement. But, from January, the program will be cut to 30 billion euros per month and extended until at least September.

December Comex silver last traded at $16.78 down 0.86% on the day, the lowest level since October 6. Meanwhile, popular silver-backed exchange-traded fund iShares Silver Trust (SLV) was last seen at $15.85.

Mikanikrezai noted that the silver price action has been disappointing since the middle of August, with prices trading sideways.

Despite the largely flat results, silver rose above the downtrend line from the 2016 high in September, reaching $18.21 per ounce, said Mikanikrezai.

“The lackluster performance of silver prices is very surprising considering the significant wave of speculative buying since mid-August,” he wrote. “According to the latest COT data, money managers boosted their net long positions by 3,705 tonnes or 71% over August 15-October 17 whereas silver prices strengthened just 2.39% over the same period (from $16.635 per ounce to $17.033 per ounce).”

By Anna Golubova

For Kitco News


Euro down, Dollar up, gold and silver down, mining stocks getting hit hard...

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