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Silver’s Inflows: Gauging the January Rise

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Silver funds witness inflows

Silver prices have rebounded from the low levels we saw at the end of December 2016. In fact, all four precious metals have seen surging prices in 2017, with gold, silver, platinum, and palladium rising 2.8%, 4.2%, 7.6%, and 9.8%, respectively, YTD (year-to-date) as of January 11. The RSI level for silver also rose to almost 60, as compared to the level of 3 that we saw after the US Fed’s December rate hike.

Remember, the 14-day RSI level of more than 70 indicates a possibility of a downward reversion in price, whereas a level below 30 indicates the possibility an upward reversion.

The funds flowing into silver have also resurfaced so far in January. In December, we saw investors turning their backs on silver. The iShares Silver Trust (SLV) and the Global X Silver Miners Fund (SIL), both famous silver-based funds, have seen price rises this year as well.

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Mining stocks

Mining companies that saw a revival in their price during the last week include Cia De Minas Buenaventura (BVN), Silver Wheaton (SLW), Goldcorp (GG), and Alamos Gold (AGI). These four miners combined contribute about 16.1% to GDX. These four mining stocks have seen rises of 16.8%, 9%, 8.5%, and 36.2%, respectively, on a 30-day trailing basis.

The fall of the US dollar has been one of the most significant contributors to the rise in the precious metals. Silver had its highest close in almost two months, but it may see resistance at the $17.2 mark.

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