After hitting record highs in May this year, silver prices have since fallen significantly and, a number of analysts remain fairly bearish.
Several factors that are weighing on gold are weighing on silver too, these analysts say, adding that volatile price movements in the white metal have made investors skittish, with a large section preferring to stay on the sidelines and wait it out.
“In just two weeks post traversing the all-time high, silver slipped to $32.5 an ounce and gave investors the first jolt. From the low in May, silver managed to climb to $44.25 an ounce in August but could not sustain the heights for a long time. The metal is down 29% from the highs of August,” said an analyst with Angel Commodities, a research and broking firm in Mumbai.
“Taking its cue from a rise in gold prices coupled with an upside move in base metals, spot silver traded higher by 1% in the early hours on Thursday. The white metal touched an intra-day high of $30.01/oz and was hovering around 29.63/oz,” said the analyst.
“Tracking a firming trend in the global markets, silver moved up slightly today but then fell,” said P Ramesh, bullion analyst. “Many investors are worried at the swings and feel that the news from Europe will pose downside risks in the near term and are not investing in silver,” he said.
The strengthening of the dollar has also weakened the demand for silver. A Bloomberg report states that the US Mint sold 984000 ounces of silver coins in November with the month’s sales down 73% from a year ago period.
Ashok Mittal, chief executive officer of Emkay Commodities is also bearish on silver. He insists there is a good amount of correction is expected in silver over the coming days.
Kunal Shah of Nirmal Bang Commodities said it was time to sell silver. Spot silver prices have declined almost 8% over the last week and closed below the major $30-mark. Although prices recovered, the metal will remain under pressure as economic prospects weaken, he added.