Silver Wheaton Slumps as Silver Price Hits Fresh Low

Precious Metals

The silver price took a big hit Thursday, as did the share price of Silver Wheaton. However, some analysts still feel optimistic about the latter.

Update: Silver, along with gold, took an even bigger hit Friday morning, touching $15.76 per ounce. Read more here

Investors have likely been hoping that silver will end October on a high note, but given the white metal’s Thursday close of $16.46 per ounce, the odds aren’t looking good.

Though silver had a fairly steady October, holding near the $17.20 mark for much of the month, it took a big hit Thursday due to a stronger US dollar and Wednesday’s “surprisingly hawkish” statement from the Federal Open Market Committee (FOMC), as per Kitco’s Jim Wyckoff.

Specifically, he states, though the FOMC’s decision to end quantitative easing was expected, its statement “emphasized the improving U.S. economy, which led many to believe U.S. interest rates will be raised in 2015.” That was a blow for those hoping for a “dovish lean” from the committee.

As mentioned, silver closed Thursday at $16.46; earlier in the day it hit $16.33, its lowest price since March 2010.

Silver Wheaton stumbles

Also feeling the heat on Thursday was metals streamer Silver Wheaton (TSX:SLW,NYSE:SLW). The company’s share price dropped 7.06 percent that day, moving from $21.52 down to $20. That’s above its 52-week low of $19.89, but not by much.

That said, analysts at TheStreet still rate the company a “hold,” they said in a report, noting that despite some weaknesses, its “strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins.” Meanwhile, Forbes notes that Silver Wheaton has entered oversold territory, which bullish investors could take “as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.”

Junior company news

Despite the carnage in the silver market as a whole, a number of juniors came out with positive news this week. Here’s a selection of their announcements.

Wednesday, Brixton Metals (TSXV:BBB) announced an independent maiden resource estimate for its British Columbia-based Thorn project. The estimate combines three mineralized zones, which together host an inferred resource of 21.5 million silver equivalent ounces. All of the zones remain open for expansion.

Golden Arrow Resources (TSXV:GRG) on Thursday released the results of an updated preliminary economic assessment for its Argentina-based Chinchillas silver-leadzinc project. Notably, it more than doubles the project’s after-tax net present value to US$226 million at an 8-percent discount rate.

Other highlights include a processing rate of 2.9 million tonnes per year, a 2.4:1 strip ratio and a 12-year mine life.

Finally, Silver Investing News checked in with Bayhorse Silver (TSXV:BHS) CEO Graeme O’Neill at the Silver Summit, held in Spokane, Washington from October 23 to 24. Watch the video below to see what’s been happening at the company’s Oregon-based Bayhorse silver mine and to hear O’Neill’s advice for investors who may be losing faith in silver.

Click here for more videos from the 2014 Silver Summit! 


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

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