Silver’s Volatility May Lead to Price Jump

Writing for Mineweb, Lawrence Williams points out that although silver was in deficit last year and likely will be again this year, its price has not been impacted accordingly. Many, he believes, blame “murky goings on in the COMEX silver market.”

However, that doesn’t mean silver is a lost cause. Williams states:

But silver is still attracting investment – there is little sign of a major sell-off despite the poor price performance and Metals Focus expects this situation to continue. In part the volatility factor plays to silver’s advantage in this respect. Should the gold price pick up towards the year end as many expect, then the silver price should rise even more sharply generating far better returns. The market may well see silver as ‘cheap’ and the gold:silver ratio at a level which is unlikely to be maintained. Indeed Metals Focus suggests a trading range to the year end of $18.50 to $21.60 although this will have been written prior to the recent silver price falls. Should the top end of this trading range be reached then this suggests a very strong 25% increase in under 3 months – maybe unlikely, but anything is possible in the markets at the current time with so many geopolitical factors out there which could positively affect the gold price – and silver with it on steroids!

Click here to read the full Mineweb report.