Last Monday, live silver prices started with an opening bid of $16.60 and light trading kept the price in a narrow range before closing at $16.57. Solid buying in aftermarket activity moved the price up to a Tuesday open of $16.64, while ongoing momentum carried the closing bid to $16.70. The same buying trend after the market close produced a Wednesday open of $16.74 and an increase for the day on light buying to $16.82 for the final bid. However, sales following that close generated a dip in silver prices to $16.72 at the Thursday opening. More pressure from sellers took back some earlier gains and left the closing price at $16.63. Although Friday’s open of $16.65 was slightly up, light trading kept the price in a narrow range, producing a close for the day of $16.63, up three cents for the week.
The primary cause of pressure on precious metal prices was generally attributed to the announcement by several central banks concerning changes in decades-old monetary policy. 1 Following earlier comments by Fed Chairwoman Janet Yellen concerning U.S. interest rates, several nations announced they were also looking at the potential for seeking higher rates. Since silver does not pay a dividend or interest, it is common for short-term traders to move assets towards those yield-producing investments when interest rates rise.
However, the mid-week spike in silver prices reflects the ongoing uncertainty in many corners, as the U.S. dollar hit a 10-month low. Additional jitters in the stock markets around the globe added to the mixed signals that have kept traders from committing for a number of weeks.
While the U.S. markets were closed for the Fourth of July, this week should produce more insight into the economic picture here and abroad. The minutes from the recent FOMC meeting were released Wednesday, and the U.S. Employment Report will be closely scrutinized after Friday’s release. Additionally, the G20 Summit that takes place in Germany on the 7th and 8th may provide more useful information on both economic and political fronts that affect the silver market. 2