Silver Swings Up and Down after the Fed Meeting



Silver gets volatile

The past week has been disastrous for silver prices. Silver futures for March expiration rose about 2.9% on a five-day trailing basis, making it the worst-performing precious metal for the past year. Platinum is the only precious metal that gained. It rose 0.59% during the last five trading days. Platinum rose 4.8% during the month of December. Palladium rose 1.8% during the past one month. Gold and silver have made 30-day trailing losses of 0.28% and 4.5%, respectively.

Among the four precious metals, silver has been very volatile. The average ten-day volatility of silver is around 23.2 compared to a 13.5 volatility for gold on a ten-day average basis.

As you can see in the above graph, silver has seen days of major rises and falls after the Fed meeting in December. Although the overall trading range remains narrow, silver was trading between $13.50 and $14.80 per ounce.

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Silver ETF and mining

The rise and fall in silver led to a 2.8% fall in the iShares Silver Trust (SLV) during the past five trading days. The leveraged ProShares Ultra Silver (AGQ) fell 5.9% in the past five trading days.

The volatility in silver prices also extends to silver-based mining companies such as Silver Wheaton (SLW), Pan American Silver (PAAS), and First Majestic Silver (AG). These three companies have seen losses of 39.5%, 29.1%, and 35.5%, respectively, on a year-to-date basis. The five-day trailing returns for silver also remained negative due to plunging silver prices. The above three companies fell 1.8%, 0.6%, and 1.8%, respectively, on a five-day trailing basis. These companies together make up 7.1% of the price changes in the VanEck Vectors Gold Miners ETF (GDX).


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