Silver Price Targets of $50 Per Ounce Raised This Week

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European Sovereign Debt Crisis Rolls On in Spain, Bank of America Forecasts Significantly Higher Precious Metals Prices, Silver Holdings Nearing Record Levels Again, China’s Manufacturing Sector Contracts Again, Silver Targets of $50 Per Ounce Raised This Week.

After silver moved up for six weeks in a row, it would be reasonable to assume that it might need a week to consolidate. Even though the week that finished September 21st turned out to be such a time period, silver did not decline much.

It had finished the previous week that ended September 14th at $34.67 on spot markets. The white metal opened the week a bit lower at $34.25 but managed to claw back to $34.53 by Friday’s spot market close.

Catalysts for the precious metal to move up and down both presented themselves this week. The European sovereign debt crisis continued to roil markets, major banks forecast higher prices for the precious metals, and Chinese manufacturing data disappointed again.

European Sovereign Debt Crisis Rolls On in Spain

Early in the week, world markets declined as Spain’s sovereign debt troubles continued. This week, the financially troubled nation acted like it is not in a hurry to ask for a bailout from the European Union.

The reason for their hesitation is that they were able to auction both short term debt and long term debt at lower interest rates with good demand this week that ended Sept. 21st. Against this backdrop, the German economic expectations report surprised to the positive side as it turned out to be the strongest one in five months.

Other European economic data towards the end of the week was more negative. The mixed data out of Europe continued to support silver and gold prices but not to help them to make new highs.

Bank of America Forecasts Significantly Higher Precious Metals Prices

Precious metals also found support to keep them from significant correction as major banking institutions continue to step out in support of the gold and silver prices. This past week, Bank of America/Merrill Lynch predicted that the price of gold will reach $2,400 per ounce by the conclusion of 2014. This lofty level in gold would put silver prices at over $50 per ounce easily.

Silver Holdings Nearing Record Levels Again

This week, the silver institute announced that Exchange Traded Funds silver holdings are almost at record levels again. Silver investors bought nearly 32 million silver ounce so far this year. This brought the ETF silver inventories up to over 608 million ounces as of Sept 15th, worth an impressive $20.5 billion. The Silver Institute says this helps to explain why silver prices are up over 20% (as of the week that ended Sept 21st) so far for the year.

China’s Manufacturing Sector Contracts Again

China’s manufacturing PMI displayed a disappointing reading of 47.8 for its latest month this past week. This marks eleven months in a row that China’s manufacturing sector contracted. A decline in economic conditions in one of the largest economies of the world is a setback for silver, which is as much an industrial metal as it is a safe haven. This helped to keep prices for silver down this week after it had grinded higher for so many weeks.

Silver Targets of $50 Per Ounce Raised This Week

Chief Analyst Hug of Kitco Precious Metals this week raised his target on silver to over $50 per ounce. His caveat was that gold would have to rise above $2,000 for it to happen. He said that he expects gold to reach from $2,200 to $2,400 by 2015 if the Federal Reserve does not withdraw its monetary policy from the economy before then. He suggested that with gold at these levels, silver would rise to between $53 and $55 per ounce.

Take Away On Silver Market Prices

Even though silver paused in its recent run this past week news continues to supports its advance. ETF holdings of silver are at near record levels. Mainstream banks and analysts have raised their price targets for silver and gold.

The EU crisis keeps investors on edge and looking for safe havens like silver. At the same time, Chinese data disappointed this week, which fueled concerns that the world economic growth can not keep up its recovery.

Silver may consolidate further and even correct, but so long as central banks continue to print money and economic uncertainty and fear prevail, it will be well supported to move on towards the higher price targets that mainstream banks and analysts have set.

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