Silver prices have been through a roller coaster ride for the past few months. However, the new year brought some direction for silver. It continued to gain steadily. Silver rose by 7.7% on a year-to-date basis. It closed at $14.85 per ounce on February 4, 2016, after touching a high of $14.93.
Silver couldn’t reach the $15 mark. The boost for precious metals was likely due to the fall in the US dollar. The US dollar fell by 3% during the past five trading days. As the US dollar gets cheaper compared to other currencies, dollar-denominated assets become more affordable for foreign currency investors. Demand could rise. This would increase the prices.
The rise in silver prices was also seen in silver-based investments like the iShares Silver Trust (SLV). It was seen in silver mining-based investments like the Global X Silver Miners ETF (SIL). These two investments rose by 7.4% and 6.7%, respectively, since the beginning of the year.
The increase in all of the precious metals on February 4 led to increased volatility in silver prices. The volatility rose by 23% on February 4. The Relative Strength Index for silver is at 64. A figure above 70 indicates a possible reversion in the price. Currently, silver is trading 1.3% above its 100-day moving average price of $14.65.
Even a slight fall in silver is often exaggerated in mining-based stocks and ETFs. The silver mining-based companies that saw a rise alongside silver on February 4 were Silver Wheaton (SLW), Hecla Mining (HL), and Coeur Mining (CDE). These three companies rose by 4.7%, 4%, and 6.7%, respectively, on February 4. They account for 6.8% of the price changes in the VanEck Vectors Gold Miners ETF (GDX).