Beware the Ides of March: Silver Hits Five-week Low

“Beware the Ides of March” is a familiar quotation that’s often tossed around lightly midway through the month of March. This year, however, silver investors would have done well to take it seriously.  

Why? As a quick look at a price chart for the metal reveals, silver hit $21.71 per ounce, its highest price so far this month, on March 14. Since then, it has been on the decline.

Initially prompting that drop were the results of the Crimean referendum. iNVEZZ.com notes in a Monday report that while in past weeks the turmoil surrounding the peninsula “support[ed] the price of silver due to its safe-haven appeal,” the referendum’s outcome, which was widely anticipated, brought it down “in typical ‘buy the rumour, sell the news’ fashion.” As a result, silver closed the day at $21.20.

Tuesday, the metal continued to drop, hitting $20.65, its low for the day, early in the morning. It was pressured by short sellers, as per another iNVEZZ.com article, as well as caution brought on by the US Federal Reserve meeting that took place on Tuesday and Wednesday, according to Reuters.

Silver took a bit of a breather on Wednesday. It traded between $20.53 and $20.82 as investors awaited news from the Fed and as Russian President Vladimir Putin said his country has no plans to seize any more of Ukraine.

Today, however, was another story. The white metal fell sharply this morning, to $20.225, as market participants took in two pieces of news. The first, that the US Federal Reserve intends to taper its quantitative easing program to $55 billion per month, was widely expected. However, the second — that the central bank will begin to raise interest rates “around six months” after tapering concludes — shocked the market, MarketWatch states.

The white metal’s price saw little improvement as the day continued, and silver ultimately closed at $20.27 per ounce.

Company news

Monday began on a positive note for Kingsgate Consolidated (ASX:KCN), which provided a summary of the results of the definitive feasibility study for its Chile-based Nueva Esperanza silver-gold heap leach project. Highlights include proven and probable ore reserves of 17.1 million tonnes at 97 grams per tonne (g/t) silver and 0.27 g/t gold.

Later in the week, Silver Wheaton (TSX:SLW,NYSE:SLW) released its results for both the fourth quarter of 2013 and 2013 as a whole. For the full year, the company achieved record attributable silver equivalent production of 35.8 million ounces, up 22 percent from 2012. Its silver equivalent sales volume hit 30 million ounces, also a record.

Further, the company’s board of directors declared an inaugural quarterly cash dividend payment of US$0.07 per common share for 2014 and adopted a dividend reinvestment plan.

Junior company news

Silver Predator (TSX:SPD) on Monday closed a non-brokered private placement of 4,580,131 common shares priced at $0.06 each. In total, the company raised $274,808; the money will be put towards exploration at Silver Predator’s properties as well as general working capital purposes.

The same day, MAG Silver (TSX:MAG,NYSEMKT:MVG) provided assay results from the five-hole, 3,500-meter Phase 1 drill program completed at its Mexico-based Salamandra property. Highlights include hole SM14-15 at 7.89 meters grading 166 g/t silver and 1.2-percent copper, including 2.3 meters grading 3.93 g/t silver and 3.6-percent copper with appreciable lead and zinc.

Commenting on the results, George Paspalas, president and CEO of MAG, said, “Salamandra is clearly a metals-rich, multi-stage system with significant size potential as indicated by our widely-spaced drilling. We have extended our drilling program and brought in a second rig so we can continue delineating the system while fleshing out the best intercepts.”

Earlier today, Maya Gold & Silver (TSXV:MYA) filed on SEDAR the preliminary economic assessment for its Zgounder silver mine, located in Morocco. The study’s key points include a potential mine life of 10 years and first-year silver production of 647,000 ounces; after that point, the mine is expected to put out 1,027,000 ounces of silver per year.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.