Downward pressure in the silver market has not abated. Friday’s
action provided a clue as to what was in store this week. Silver was
pushed below its 50-day moving average and though it could not be kept
down at that level for the close, the metal lost $0.75. As North America
slept Sunday night, pressure was again applied to the market, setting
silver up for a week that saw it touch new lows.
The risk-off sentiment prompted investors to search for quality and safety. The dollar moved higher while the euro and gold
slumped. Silver, likewise could not remain afloat and was pushed below
its 50-day moving average, hit a fresh six-week low and closed down
$0.68 on the New York spot market at $31.67.
A market focal point this week was a two-day Federal Open Market
Committee meeting that appears to have produced nothing especially
meaningful for the silver market — except perhaps disappointment for
those wanting more action from the Fed. The benefits of QE3 are rapidly
disappearing and US economic data continues to improve. That is not only
weighing on hopes that the Fed will be prompted to act more
aggressively, but is also leading to speculation that its current
program may not continue as long as many would like.
Monday morning, silver fell to a new low coming out of the gate. To
the relief of bulls, the metal was able to claw its way back and
actually closed near the session high at $32.45 with a gain of $0.38.
But Tuesday, those vying for lower prices had their wishes granted.
The markets were forced to digest news of rising Spanish bond yields and
the fact that the nation’s economy contracted during the third quarter;
further, Moody’s downgraded some sectors of the Spanish economy. In the
US there was a slew of disappointing company earnings reports.
