Thursday saw the precious metals futures dive with gold posting its biggest loss in 13 months, and silver with its 19 month drop. On the Comex division of the New York Mercantile exchange, Gold for April delivery tumbled 2.4 percent, and ended at $1,255.90 an ounce. Silver for March delivery dipped 7.3 percent, closing at $16.77 an ounce. This recent decline for silver marks the lowest it’s been since June 20, 2013.
On the plus side, U.S. Mint bullion sales posted gains of 1,000 ounces in American Gold Eagles and 111,500 ounces in American Silver Eagles. Gold Eagle sales are the highest they’ve been since Jan. 2014, at 81,000 ounces for the month. At 5.4 million, Silver Eagle sales are at their highest since reaching 5,790,000 in October when the U.S. Mint declined to ration the amount they sold.
“The market was expecting the Fed to be more dovish and was disappointed, and it seems that the bulls in gold and silver are exhausted,” Bloomberg News quoted Mike Dragosits, a senior commodity strategist at TD Securities in Toronto. “At the moment, Europe seems calm, and there is really no reason for flight to safety.”
The UAE is scheduled to meet next Thursday at the Almas Towers of the Dubai Multi Commodities Centre for their annual conference. And for precious metals traders and investors, expect the conversations to be in high spirits.
Silver investors are hoping January is a sign of things to come for the marketplace. Though silver prices are still far behind the 1980 high of $50 an ounce, the precious metal is off to its best start since 1983 with prices being up 15 percent these first three weeks of the year. All that being the case, equites are still stuck in a rut.
Silver moves hand in hand with gold prices, and are leveraged to the upside and contrariwise. Gold prices have certainly reaped the benefits of the Swiss National Bank’s decision to de-peg its franc from the euro, surging from $1,220 to $1,305 an ounce. And if this year proves to be good for gold, expect it to be great for silver.
Silver supplies are constrained presently most likely due to slouching copper prices, given that silver is produced mainly as a by-product of copper and zinc mining. So as copper mining slumps, the price of less-available physical silver will go up in accordance.