Silver Market Update – Week Ending September 7th, 2012

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ECB Finally Agrees to Print More Money, Silver Makes New Five Month High, Shanghai Silver Futures Hit Record Highs.

Silver Price Gains - ECB Finally Agrees to Print More Money

For the last few weeks, silver has been on an unstoppable romp as it eliminated one resistance level after another. First $28.45 fell by the wayside. Then $30 per ounce met an untimely demise. Since then, silver has been able to consolidate these gains and continue to rise along with its big brother gold. Silver even leads gold much of the time on this latest rally.

The white metal continues to run upward and onward on its still recent technical breakout, but this week that ended September 7th saw still more fundamental news that you had read about in prior issues of the newsletter here come together.

Now that the Federal Reserve had their chance to boost the precious metals prices, it was the European Central Bank’s turn to make their mark.

ECB Finally Agrees to Print More Money

This week’s calendar saw additional weak data come from Europe as the European Central Bank held its all important meeting to decide what to do to ease the European Sovereign debt crisis. First the Gross Domestic Product of the Euro Zone fell .2% during the second quarter, which brought the decline for the year to down .7%. At the same time, EU businesses decreased their spending totals a sobering .8% and consumers cut back their purchases .2%.

The ECB held their monthly meeting with all of this data in mind. They delivered what the markets had waited for and wanted finally, some good old fashioned real money printing. The way that it will work is that the ECB will purchase the bonds of struggling EU countries.

The difference is that this time they will not sell other assets to offset the new purchases, which means that they will now print money in earnest. This action drove silver prices markedly higher. They had finished the previous week at $31.74 and now pushed up to over $33 per ounce on the decision and the press conference that accompanied it.

Later that same day Thursday, better than expected economic news came out in the U.S., which  showed payroll data improved. This caused silver prices to back off of their highs, yet even so, they managed to push on ahead Friday to make yet another incremental high in this latest charge forward.

Silver Makes New Five Month High

By the time Friday’s close of the spot silver markets rolled around, silver had blown out its old five month high. When it finally closed, silver prices stood at $33.67 per ounce. It is hard to take the silver bears and critics seriously these days with the all of new incremental highs in the white metal.

Shanghai Silver Futures Hit Record Highs

The mainstream media did not make much of a deal about this little yet critical news nugget. Shanghai silver futures hit record highs this week on Tuesday at the price equivalent of $34 per ounce. China has only recently opened up this silver and gold exchange. This important new center for precious metals in China will only grow more significant with time, so it is wise to keep an eye on what happens there.

Take Away On Silver Market Prices

When commodities like silver begin to make new highs in exchanges based in China, you should pay careful attention to them. It is no accident that silver is embracing new levels on the Shanghai exchange.

The European Central Bank has given new energy to silver prices with their decision to print money more liberally. All of these factors continue to point to higher silver prices as it roars on towards that $37 price target that you have read about here. Get on board the silver train or get out of its way, otherwise it will run you down.

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