Silver Loses Its Luster Alongside Gold



Silver retreats

During the past month, silver has been the second-worst performing precious metal after palladium. Palladium lost almost 14.1% on a trailing-30-day basis. On the other hand, Silver gave up 7% of its price on the same basis. Gold and platinum lost almost the same on a 30-day trailing basis as gold fell 5.6%, and platinum fell 5.1%. The ETF fund flows have also been substantially affected in the previous month.

Article continues below advertisement

The iShares Silver Trust (SLV) fell on similar lines. The SLV Trust fell 6.9% on a trailing-30-day basis. The fund also witnessed some reversal in the long positions. The hedge funds that had gone long on the silver-backed ETF just prior to the October FOMC meet have seen substantial losses. Above you can see the fund flow chart of the SLV Trust for 2015.

US dollar versus precious metals

The US dollar had a gaining streak on a trailing-five-day basis as it rose about 2.1%. On the other hand, all the dollar-denominated precious metals have been on an extreme losing streak. As the dollar continues gaining, these precious metals could keep getting expensive for buyers of other currencies as the dollar is now more costly for them.

Silver seems to have a trading range in the $14.4–$16.3 levels. The ProShares Ultra Silver ETF (AGQ)—another silver-based leveraged ETF—has seen a fall of 13.7% on a trailing-30-day basis. The silver-based mining companies have also witnessed a downfall in their share. These companies include Hecla Mining (HL), Pan American Silver (PAAS), and Coeur Mining (CDE). These companies fell 24.2%, 11.8%, and 18.3%, respectively. These three companies together determine almost 3.5% of the price fluctuations in the VanEck Vectors Gold Miners ETF (GDX).


More From Market Realist