How Is Overall Market Sentiment Affecting Silver?



Silver rebounds

Silver futures for December expiration closed at $17.8 per ounce on October 25, only a little lower than its day high. Silver is trading close to its 100-day moving average price. The open interest in silver call options is almost double that of the put option open interest. Platinum was also trading higher and hit its two-week high of $968.8. It closed at $964.9 an ounce. Palladium ended the day at $634.9 an ounce.

The silver-based funds that rose on Tuesday following the gains in silver include the iShares Silver Trust (SLV) and the Velocity Shares 3X Long Silver (USLV). These two funds rose 0.96% and 2.8%, respectively.

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Silver miners rose

Silver-based mining companies First Majestic Silver (AG), Hecla Mining (HL), Silver Wheaton (SLW), and Pan American Silver (PAAS) together make up about 8.5% of the VanEck Vectors Gold Miners Fund (GDX). These stocks rose 3.5%, 3.5%, 1.8%, and 1.1%, respectively, on Tuesday.

Much of the movement in precious metals over the past few weeks has been a result of speculation about the Fed’s rate hike. The Federal Reserve members discussed their views on the economy, which affected precious metals. The upbeat US economic data could prompt the Fed to hike rates soon. Charles Evans, the Chicago Fed president, said on Monday that the US central bank will raise its policy rate three more times by the end of next year if inflation expectations and the labor market continue to improve. US manufacturing rose to a one-year high of 53.2 as per the Markit Survey.

The rate rise is a threat not only to gold, but also to other precious metals like silver, platinum, and palladium.


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