The rush into the “safety” of the dollar took a bite out of silver bullion today, driving futures to settle at a three-month low.
Is it time to pick up some holdings in the Silver Bullion Trade
Take the longer view and the metal could still be attractive, per Morgan Stanley’s Hussein Allidina and Peter G. Richardson. They’re positive on silver bullion amid negative real interest rates that just about everybody expects to persist for a prolonged period. Low rates should “underpin a solid core of investment demand” and have a “quarantining” effect on ETF holdings, they write in a note this week. The key risk they cite: The weak economy this year and possibly next could crimp silver bullion price but not by enough to convince producers to scale back and avoid stockpiling the stuff.
Commerzbank highlights a separate silver bullion-friendly trend: China. Eugen Weinberg, head of commodity research, notes today that China imported 255.4 tons of silver in March, according to customs data, which he says is the highest figure in six months.
Another factor: The CME Group (CME) lowered margin requirements for silver bullion futures recently, potentially greasing this commodity’s wheels.
Some technicians suggest that the current pullback has more room to run, which would suggest caution for the moment. Janney Montgomery Scott’s Dan Wantrobski wrote this morning that he is looking for silver Bullion to get back above $32.10 to break out of their short-term bearish pattern. The metal finished down 3.5% at $30.53 Monday afternoon.
Silver Bullion prices are giving up early gains as investors wait for the FOMC statement. Consensus expectations are not for an announcement of renewed QE but for leaving the door open for further stimulus. The lackluster housing data and the disappointing jobs numbers should give the FOMC political cover to be a bit more dovish in their statement.
Silver Bullion Three-Month Low: A Buy?
The rush into the “safety” of the dollar took a bite out of silver bullion today, driving futures to settle at a three-month low.
Is it time to pick up some holdings in the Silver Bullion Trade
Take the longer view and the metal could still be attractive, per Morgan Stanley’s Hussein Allidina and Peter G. Richardson. They’re positive on silver bullion amid negative real interest rates that just about everybody expects to persist for a prolonged period. Low rates should “underpin a solid core of investment demand” and have a “quarantining” effect on ETF holdings, they write in a note this week. The key risk they cite: The weak economy this year and possibly next could crimp silver bullion price but not by enough to convince producers to scale back and avoid stockpiling the stuff.
Commerzbank highlights a separate silver bullion-friendly trend: China. Eugen Weinberg, head of commodity research, notes today that China imported 255.4 tons of silver in March, according to customs data, which he says is the highest figure in six months.
Another factor: The CME Group (CME) lowered margin requirements for silver bullion futures recently, potentially greasing this commodity’s wheels.
Silver bullion, Crowne-Gold-Silver-Bullion—digitalmoneyworld (Flickr.com)
Some technicians suggest that the current pullback has more room to run, which would suggest caution for the moment. Janney Montgomery Scott’s Dan Wantrobski wrote this morning that he is looking for silver Bullion to get back above $32.10 to break out of their short-term bearish pattern. The metal finished down 3.5% at $30.53 Monday afternoon.
Silver Bullion prices are giving up early gains as investors wait for the FOMC statement. Consensus expectations are not for an announcement of renewed QE but for leaving the door open for further stimulus. The lackluster housing data and the disappointing jobs numbers should give the FOMC political cover to be a bit more dovish in their statement.