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Mineweb reported that some analysts believe silver is set to sink even lower than its current lackluster price.
Mineweb reported that some analysts believe silver is set to sink even lower than its current lackluster price.
Scotiabank analysts said in a recent report:
Silver prices have returned to the levels seen before the financial crisis that started in 2008, and before quantitative easing (QE) was introduced. It might, therefore, well be into the process of discounting the prospects of an end of the QE. For now, however, that seems to be one of the reasons behind the price weakness.
Now that investors are not buying much silver through exchange-traded fund (ETFs), less of the supply surplus is being absorbed. That means more of the surplus has weighed on prices.
Meanwhile, investment firm Mecklai Financial commented:
The dollar index is at a 4-year high at 84.80 levels, and can move to test 89 levels in the near term. The US Fed which is expecting to raise interest rates in the next year, and QE is on the brink to end later this year, has added pressure on both gold and silver.
The absence of geopolitical concerns has enabled investors to move out from bullion metals and enter in the dollar index, boosting optimism for the US economy, thus making bullion lose its shine. Technically, silver is moving in a negative direction by breaching its previous lows. Currently quoting at the level of $17.72, silver is expected to move back down to $14 levels over the short term.