Silver Prices on the Rise despite Ireland Debt Crisis Bailout

By Vivien Diniz – Exclusive to Silver Investing News

In uncertain times, investors shy away from shaky assets and play it safe with what they know to be solid; silver and gold. Last week’s markets were influenced by Korean tensions that had investors moving away from daring investments and towards safety in the form of gold. This trend helped gold outperform its precious metal companions. This week, the game of market uncertainty continues, following the news of  Ireland’s $113 million (85 billion-euro) aid package.

The aid package for Ireland will include 67.5 billion euros from the European Union and 17.5 billion euros from the International Monetary Fund to help contain the debt crisis. Ireland is the second country this year, after Greece, to undergo a destabilization of currency and force the EU to set up a rescue fund.  With the markets rattled over the debt crisis, silver and gold prices are rising in response.

The spot price of gold rose $4.10 or 0.3 percent today to reach a high of $1,370 an ounce, while the price for silver climbed $0.51 or 1.91 percent to a high $27.27 per ounce. Silver futures for March delivery took a plunge  of 7.2 cents, or 0.3 percent, to sit at $26.70 an ounce on the Comex. Barring today’s drop, the metal has done increasingly well to see a 59 percent jump this year.  The uncertain economic environment gave silver the push it needed to reach its 30-year high of $29.34, earlier this month. Silver is fighting to be the best performer for the month of November.

Today’s positive silver movement thrust share prices for companies like Silver Wheaton into a steady climb Monday. Silver Wheaton Corp (TSX:SLW) shook off its early morning setbacks to end the day with a 1.31 percent gain to a closing price of $36.40. Hecla Mining Company (NYSE:HL) also gained today, jumping 4.20 percent to close today at $9.17.  Silvercorp Metals Inc. (NYSE:SVM) experienced a 2.90 percent rise in its stock price to $12.08.

Following a slip on Friday to $26.18, iShares Silver Trust (NYSE:SLV), the world’s largest silver-backed ETF, saw their price jump Monday by 1.43 percent to $26.48. The sell off occurred mostly due to the stronger U.S. dollar.

Despite the rising prices in silver, the European debt situation has left the market unsettled. Peru’s sol has also dropped after Europe’s bailout of Ireland failed to ease concern over the regions’ debt crisis. The sol fell 0.407 percent Monday to $2.828 U.S. “The European issue is still making the market nervous. There’s more aversion to risk, which has affected dollar supply,” said Gonzalo Navarro, a Banco Santander head trader in Lima.

While the Ireland crisis plays out, investors might want to brace themselves for the potentially bumpy road to follow for Portugal and Spain.