Silver, often called the white metal, is traded in dollars and cents per ounce, with market activity taking place worldwide and at all hours of the day. Key commodities markets like New York, London and Hong Kong are just a few locations where it changes hands. London is the center of physical silver trade, while the COMEX division of the New York Mercantile Exchange is where most paper trading is done.
Physical silver is sold on the spot market, meaning that buyers pay a specific price for the metal and then have it delivered immediately. Paper trading is done via the futures market, with participants agreeing for the delivery of silver in the future at an agreed-upon price. In such contracts, two positions can be taken: a long position to accept delivery of the metal, or a short position to provide delivery of the metal.
Paper trading might sound like a strange route to take, but it can provide investors with flexibility that they wouldn’t get from buying and selling physical silver. The most obvious advantage is perhaps the fact that trading in the paper markets means market participants can benefit from holding silver without needing to store it. Furthermore, futures trading can offer more financial leverage in that it requires less capital than trading in the physical market.
In terms of historical price action, silver’s highest average annual price was $35.12 per ounce in 2011. The rise came on the back of very strong silver investment demand, and was more than double the 2009 average silver price of $14.67.
Like other commodities, silver’s price is most heavily influenced by supply and demand dynamics. The silver price is a little unique, however, in that it’s known for its volatility. That characteristic is partially due to the fact that the metal is subject to both investment and industrial demand. In other words, it’s bought both by investors interested in using it as a store of wealth and by manufacturers looking to use it for different applications. Those applications are incredibly varied – silver has diverse technological applications and is used in devices like batteries and catalysts, but it’s also used in medicine and in the automotive industry.
Looking at supply, in 2014, the world’s top three producers of the metal were Mexico, China and Peru. Interestingly, even in those countries the white metal is usually produced as a by-product – for instance, a mine producing primarily gold might also have silver output.
As a final note, it’s important for investors to be aware that price manipulation is a major issue in the silver space. JPMorgan Chase (NYSE:JPM) was long at the center of such claims, though the case against it was dismissed last year. Most recently, 10 banks were hit in a US probe on precious metals manipulation.
While that might sound disheartening, key industry figures like silver guru David Morgan have emphasized that in reality the silver market is no more manipulated than any other market. Furthermore, in 2014 the London Silver Market Fixing stopped administering the London silver fix, which had been used for over a century to fix the price of silver. It was replaced by the LBMA Silver Price, which is run by the LBMA, CME Group (NASDAQ:CME) and Thomson Reuters (TSX:TRI,NYSE:TRI) in a bid to increase market transparency.
Silver mine production fell by about 2 percent in 2016 and could decline even more this year. Here’s what investors need to know.
FIRST MAJESTIC SILVER CORP. (FRANKFURT:FMV)(TSX:FR)(NYSE:AG)(BVM:AG) (the “Company” or “First Majestic”) is pleased to announce the consolidated financial results for the Company’s fourth quarter and year ended December 31, 2016. The full version of the financial statements and the management discussion and analysis can be viewed on the Company’s website at
Vancouver, B.C., February 21, 2017: Exeter Resource Corporation (NYSE-MKT:XRA, TSX:XRC, Frankfurt: EXB – “Exeter” or the “Company”) is pleased to announce that it has commenced a 6,000 metre drill program on its 100% owned Caspiche gold-copper project in Chile.
By Jocelyn Aspa
The gold price is on pace for a third straight week of gains.
Rockcliff Copper Corporation (“Rockcliff” or the “Company”) (TSXV:RCU)(FRANKFURT:RO0)(WKN:A142TR) is pleased to announce drill hole assay results from its on-going Phase 2 drill program on the Talbot Property, Manitoba. Additional geophysical resurveying of historical drill holes has discovered a conductive plate immediately below and down dip of the main lens of
Kootenay Silver Inc. (TSXV: KTN) is pleased to announce drilling has returned a series of high-grade silver intercepts from the latest 13 holes of a multi-phase drill program being conducted and operated by Pan American Silver Corp. (“Pan American”) on its La Negra silver discovery in Sonora, Mexico. The
Benton Resources Inc. (TSXV:BEX) and its joint venture partner Nordmin Engineering Ltd. (“Nordmin”), is pleased to release the results of an updated positive preliminary economic assessment (“PEA”). Included with this PEA update is the announcement on the advanced Environmental Assessment (EA) progress for its Cape Ray Gold Project, located approximately
Medgold Resources Corp. (TSXV:MED) (the “Company” or “Medgold”) is pleased to announce that Fortuna Silver Mines Inc. (NYSE:FSM)(TSX:FVI) (“Fortuna”) has completed its warrant exercise by purchasing 10m shares of Medgold at CAD $0.15 each, for total proceeds of CAD $1.5 million. Fortuna now owns 23.97% of Medgold shares. Medgold will
By Jocelyn Aspa
Gold rebounded from a two-week low this week, while silver neared a 10-week high.
February 2, 2017, Vancouver, B.C. – Northern Vertex Mining Corp (TSXV:NEE) is pleased to provide an update on mine procurement, construction, permitting and exploration activities at the company’s 100 % owned Moss Mine gold-silver project, located in the historic Oatman Mining district in NW Arizona.
Timberline Resources Corporation (OTCQB:TLRS)(TSX VENTURE:TBR) (“Timberline” or the “Company”) announced today positive preliminary results from on-going metallurgical testing being performed on mineralized material at its Talapoosa gold project in Lyon County, Nevada. The testing is designed to confirm the predicted gold and silver recoveries and assess leaching efficiency in the
K92 Mining (TSX VENTURE:KNT)(OTCQB:KNTNF) is pleased to announce the latest results from the ongoing grade control drilling program at its high grade Kainantu Gold Mine. K92 is currently ramping up the Kainantu Gold Mine towards commercial production, with its longest continuous production run to date now commenced.
In September of 2016, K92
Endeavour Silver Corp. (TSX: EDR) (NYSE: EXK) provides 2017 production and cost guidance for its three producing mines in Mexico: the Guanaceví mine in Durango state and the Bolañitos and El Cubo mines in Guanajuato state.
In 2017, the Company’s plan is to produce at slightly lower throughput and higher silver
By Jocelyn Aspa
With the anticipation of Donald Trump’s inauguration on Friday, a number of commodities had a bit of a rollercoaster week.
Rockcliff Copper Corporation (“Rockcliff” or the “Company”) (TSXV:RCU)(FRANKFURT:RO0)(WKN: A142TR) is pleased to announce drill hole assay results from its on-going Phase 2 drill program on the Talbot Property, Manitoba. The Talbot Property forms part of Rockcliff’s Snow Lake Project which is located within the prolific Flin Flon-Snow Lake Greenstone Belt,
Turquoise Hill Resources today announced fourth quarter 2016 production for Oyu Tolgoi.
Jeff Tygesen, Turquoise Hill Chief Executive Officer, said, “Oyu Tolgoi’s operations performed very well during 2016, running at record levels for material mined and ore treated. Oyu Tolgoi also exceeded both copper and gold production guidance for the year.