Over the last week silver hit a six-month low as price dropped significantly. That created a perfect opportunity for traders to take positions. Therefore, a number of investors opted for increasing their holdings. Recently the US economy is showing some sign of recovery. So far, a second possible financial crisis in the nation is out of market players’ concerns.
Earlier on Monday, spot silver traded at $28.85 per ounce. The price is marginally higher from the previous session. The minor gains today are on the back of positive Asian equities and a stronger euro currency.
Yet, big gains during the day are not expected, even some analysts expect the minor gains to fade. There is no major influencing data expectation. Though, it is widely believed that it’s likely that silver will continue its bearish trend. Therefore, a good short-term move might be to sell at the higher levels.
Last week silver fell by 3 cents, from $28.79 to $28.76 per ounce. Silver is 5.2% lower in 2013, 41.9% down from its high from early-2011.
The precious metal is still supported by flourishing environment in major economies such as the US and China. Also there is enough global economic uncertainty to ensure that the current silver price fall is only temporary.
As for the long term silver is still a great asset to buy into right now. The metal won’t be affected whether the US economy will improve or will be able to sustain improvement or not.
A growing number of investment banks downgraded their silver forecasts. The U.S. Federal Reserve promised to continue printing $85 billion per month in new money.
In general, silver may remain subdued in the short term. Though, the slightest clues of problems in the US economy will send investors back into the safe haven metal purchases.
The same will happen even if the European issues appear to be getting worse. Investors are not likely to sideline wholesale silver even if the US economy is recovering more than well. That’s because other large economies still have difficulties with no sign of any effective solution in the near future.