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Silver may have been the best-performing precious metal during 2015’s first quarter, but April hasn’t treated it overly well.
Silver may have been the best-performing precious metal during 2015′s first quarter, but April hasn’t treated it overly well. In particular, the white metal has had a tough time this past week, taking a steep plunge on Wednesday following positive data out of the US housing market.
In terms of exactly what data hit the market, a report put out by the National Association of Realtors shows that in March, sales of existing homes reached the highest level in 18 months. Specifically, sales of existing homes increased 6.1 percent, reaching a seasonally adjusted annual rate of 5.19 million in March. That’s up from February’s 4.89 million.
Lawrence Yun, chief economist for the National Association of Realtors, commented, “[t]he combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years.”
That’s good news for the US economy, but not particularly good news for commodities. As The Wall Street Journal points out, the strong housing data “bolstered the case for the Federal Reserve to raise interest rates in the next few months.” And as investors are well aware, a boost in interest rates won’t be good for gold and silver prices — that’s because they have trouble competing with yield-bearing investments when interest rates are higher.
Fortunately, silver and gold continue to garner a little support from the situation in Greece. The country is ready to withhold payments worth 2.5 billion euros from the International Monetary Fund in May and June, and if that happens, widespread economic instability is expected to be the result. In a scenario such as that, precious metals would likely benefit.
Investors will no doubt be waiting to see what next week brings in terms of the situation in Greece. As of end of day Thursday, the silver price was sitting at $15.85 per ounce. It’s down 1.46 percent year-to-date and 6.41 percent since the start of April.
Company news
Orex Minerals (TSXV:REX) and its partner Fresnillo (LSE:FRES) announced Tuesday that a Phase IV drill program of about 4,500 meters has begun at the Mexico-based Coneto gold-silver project. This fourth phase is intended to “test down dip and along strike from gold-silver intercepts on the La Bufa, Santo Nino, Loma Verde, Impulsora, Durazno and Promontorio structures in about 100 metre step-outs,” and Orex President Gary Cope said it should lead to a preliminary resource estimate for Coneto.
First Majestic Silver (TSX:FR,NYSE:AG) said Wednesday that it’s closed a bought-deal private placement announced on April 6, 2015 and led by BMO Capital Markets. The company issued 4,620,000 common shares priced at C$6.50 each for gross proceeds of C$30,030,000 million
The company also said recently that its unaudited Q1 2015 financial results will be released on May 7, 2015.
On Thursday, MAG Silver (TSX:MAG,NYSEMKT:MVG) reported results from four exploration step-out holes completed at the Valdecanas vein at the Minera Juanicipio joint venture property; MAG holds a 44-percent stake and Fresnillo holds the other 56 percent.
The company said that the holes “include the three widest and deepest intercepts to date on the property.” Commenting further, George Paspalas, president and CEO of MAG, commented, “[w]e are extremely pleased to see such a dramatic widening in tandem with strong grades in the Valdecañas Vein at these depths. The geological providence of this system continues to deliver significant results.”
Finally, Sandspring Resources (TSXV:SSP) has amended its precious metals purchase agreement with Silver Wheaton (TSX:SLW,NYSE:SLW) subsidiary Silver Wheaton (Caymans) to include a silver stream. Among other requirements, Silver Wheaton must pay Sandspring incremental, up-front cash payments totaling US$5 million for 50 percent of the payable silver production from Sandspring’s Toroparu mine in Guyana.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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Gold Price at Three-week Low as US Housing Market Gains Strength