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This Week In Silver: Barely Above Lows

ByRyan Jordan
Published 12/14/2013, 07:08 AM
Updated 07/09/2023, 06:31 AM
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Silver finished up the week basically flat, barely above the multiyear lows we saw last June. Besides the seemingly endless discussion of whether or not the Fed will taper this month or next, continued disinflation can be seen with government price data (to the extent that anyone trusts this data.) Still, the bears have been in control this month– though things could always be worse. Many observers of the market indicate tax loss selling is upon us– which mainly impacts the mining shares– but negative sentiment from that sector can and often does effect trading in the metals themselves.

So the weakness we are seeing right now may be nothing more than window dressing from money managers who don’t want to be caught dead showing positions in the losing precious metals space as year end approaches. As many have said repeatedly, it feels as though everyone is on one side of the trade here with the precious metals, and we have to wonder for exactly how long that will continue. After all, the stock market– at least to this observer– appears to be priced to perfection.

There is no inflation on the horizon, and yet supposedly our monetary masters over at the Federal Reserve have kept the deflationary forces at bay, as well. One wonders for how long they will be able to have things both ways– to keep the speculative, animal spirits going, without there being any fallout, or need to significantly tighten. I also need to add once again that oil appears to be on the move– which is not something that you are supposed to be seeing in a disinflationary environment. The direction of oil might just be the key to the direction of silver in the new year.

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