Silver Price Stuck Below $17 per Ounce

Gold has been hammered this week, and unfortunately for fans of silver, the white metal has suffered much the same fate. It fell as low as $16.30 per ounce Wednesday afternoon. 

Its downturn has largely been spurred by concern about weaker precious metals demand from China during the Lunar New Year holiday. That occasion will close the markets in the Asian nation for five trading days starting Wednesday.

Though the situation in Greece provided some support for both silver and gold earlier in the week, its impact has been limited. Explaining the situation to Bloomberg, Tai Wong, director of commodity products trading at BMO Capital Markets, said, “[a]t the moment, the market is discounting the bad news out of Greece as it still expects some kind of last minute solution.”

Meanwhile, uncertainty surrounding the ceasefire between Ukraine and Russia has also done little to help silver. Though Kitco notes that the deal “is on shaky ground amid reports of fighting in some cities in eastern Ukraine,” investors are apparently not worried enough about it to buy into precious metals.

Moving forward, market watchers will be looking for the release of the minutes for the US Federal Reserve’s January meeting. Adam Koos, president of Libertas Wealth Management Group, told MarketWatch, “[g]old will likely find a soft landing if the minutes reflect a dovish tone. However, policy speculation has definitely been shifting toward a potential rise in interest rates sometime in 2015 — it’s also been hinted at by a few of the Fed officials.”

The same will likely apply to silver.

Stocks round-up

Despite silver’s poor price action this week, a few companies focused on the white metal managed to achieve marginal gains on Wednesday. Here’s a look at three of them:

• Alexco Resource (TSX:AXR,NYSEMKT:AXU) — up 1.67 percent, at $0.61, on the TSX; up 1.88 percent, at $0.481, on the NYSE MKT.
• Great Panther Silver (TSX:GPR,NYSEMKT:GPL) — up 1.51 percent, at $0.64, on the NYSE MKT; unchanged at $0.78 on the TSX.
• Silver Wheaton (TSX:SLW,NYSE:SLW) — up 1.06 percent, at $21.99, on the NYSE; up 0.07 percent, at $26.91, on the TSX.

It may be interesting to keep an eye on how those stocks do following the release of the Fed’s January minutes.

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

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