What's Next for Silver Prices
Silver prices got a boost yesterday (Wednesday), giving brief relief to their three-month downtrend. The white metal rose on short covering and bargain hunting purchases. As gold touched on a new low for the year before rebounding, silver closed in on $27.983 for the July contract, up 19.2 cents. But silver priceshave dropped in 16 of the last 21 trading sessions through Wednesday. So why the volatility? Here's what's weighing on silver - and why a price rally is still to come. The Bears are Out It hasn't been a pretty marketplace and as we enter the summer months. We've seen Facebook fall flat with its IPO, questioned whether Greece will leave the Eurozone and asked if Spain is in more serious trouble than initially thought. The troubles have weighed on silver prices. Silver spiked to over $35 an ounce in late February, but has since slipped back near $28 an ounce, where it started the year. Just in the last month, the Global X Silver Miners ETF(NYSE: SIL ) has fallen almost 19%. The month isn't quite over yet and there are still hurdles for silver prices to face. The U.S. economic growth numbers just released Thursday showed first-quarter growth slowed to 1.9%, down from a previous estimate of 2.2%. The latest U.S. employment numbers will be released Friday. This data combined will give a preview of what the Federal Reserve policymakers could hash out at their June meeting. And should Spain ask for a bailout of Greek proportions, metals could drop in the short-term as investors run to the safety of the dollar. But the long-term silver prices outlook remains bullish, as we told you a few weeks ago. "The long-term bull market is still very strong," Charles Morris, who oversees about $2.5 billion at HSBC Global Asset Management, told Bloomberg News earlier this month. "Silver spends more time going nowhere than it does going up, but when it goes up it tends to do it very quickly." Silver's next upside breakout has been forecast to come between $29 and $30 per ounce, where it's trading now. What will help boost the metal higher? To continue reading, please click here...
