Gold Buy-Stops Trigger and Silver Rises Sympathetically – HSBC Cites Recently Strong All Around Silver Demand – New Silver ETF Fund Allows Silver Bullion Redemption – Risk Aversion Returns With A Vengeance to Support Silver and Gold – Industrial Demand for Silver Reaches New Highs.
Silver posted another consolidating week with a modest drop for the week that ended Friday, March 15th. The white metal managed to decline from $28.87 spot market open on Monday to $28.79 by spot market weekly close Friday afternoon.
This represented a drop of less than .3% on the week. Silver continues to be supported by fundamental news such as an HSBC report that cited higher silver demand, a new silver ETF, the return of risk aversion, and new record levels of industrial demand for silver that economists project for the next several years. This week, technical buying also returned to help silver hold its own.
Gold Buy-Stops Trigger and Silver Rises Sympathetically
Silver has long been a hostage of its big brother gold, but this week, the hostage situation turned far more positive. Gold ripped out of its medium term trading range of $1,560 to $1,585 and threatened a close even over $1,600 by the end of the week. Silver responded sympathetically, fighting off sellers during the week as gold buy stop orders triggered and weak short hands were washed in blood.
HSBC Cites Recently Strong All Around Silver Demand
One advantage that silver has always clung too over gold is that it is quite possibly the world’s most useful metal. There are over 10,000 industrial and commercial applications for silver, which puts gold to shame.
HSBC updated investors and analysts on silver applications this week. China massively uses silver in its global export business that stems from semiconductors and computers. Electronics and electrical industries employ the lion’s share of silver usage around the world. In fact, over half of global silver demand is a direct result of industrial and commercial applications.
If you turn to the investment and safe haven demand front, HSBC reminds that physical silver coin demand continues unabated, with the U.S. mint having set a new sales record just last month.
New Silver ETF Fund Allows Silver Bullion Redemption
Well respected investment products purveyor Van Eck Global has just filed paper work to start up new silver and gold ETF’s. It is always bullish for the precious metals when new ETF’s are launched to bring in additional investors to the fold.
This particular new fund is unique in the U.S., as both will allow silver and gold investors in the shares to redeem their shares for physical silver and gold bullion or coins when they decide to cash out. This cuts the uncomfortable, direct link bond between American precious metals ETF’s and greenbacks once and for all. Silver prices are well supported by this new development that is sure to significantly increase the demand for the physical metal over the medium term.
Risk Aversion Returns With A Vengeance to Support Silver and Gold
If you had missed the risk aversion trade that typically support silver and gold so nicely, then you were relieved to see it reappear this past week. Between Italy’s recent election gridlock and woes, downbeat recent data emerging from the EU economies, and Italian and British sovereign debt rating downgrades, investors are once again running a bit scared.
Add to this the still developing story about Cyprus’ bailout terms that look likely to seize ten percent of all depositors’ money within the troubled island nation’s banks, and you have a recipe for steadily grinding higher silver and gold prices.
Industrial Demand for Silver Reaches New Highs
You saw earlier that the world’s largest international bank (by virtue of its over $3 trillion balance sheet) HSBC has noted that silver is receiving far greater attention than in the past. Now the news that silver is growing in economic input importance is official.
The Silver Institute’s Executive Director Michael DiRienzo pointed out this past week that the demand for silver industrial fabrication has risen to over 483 million troy ounces of the white metal for the years ranging from 2012 to 2014. This represents an impressive 53% increase over the annual silver demand recorded from 1992 to 2001.
This is because silver is truly finding uses in applications that include electronics, medicine, health, solar power, communications, superconductors, batteries, computers, silverware, and jewelry, to name the more important ones.
Take Away On Silver Market Prices
Since honesty is always the best policy, it is time for the silver detractors out there to come to grips with reality about silver’s increasingly positive prospects both from a fundamental and technical point of view. The longer term uptrend for silver remains solidly in play so long as the price per ounce sits comfortably atop $26.
Silver has yet to even threaten the $27 per ounce price. This means that the prospects for the white metal to move higher have almost never been better. Ignore the truth, or fight it, at your own personal risk and loss.