All trading involves risk. Losses can exceed deposits.

Bears seize silver

The bounce in silver has run out of steam, with the white metal dropping back below $20 an ounce.

All trading involves risk. Losses can exceed deposits.

A quantitative easing-inspired rally has come to an end, as bears once again take control of the silver price which is undergoing its first decline in around four sessions.

Some might be hoping that the drop in price will mean that production will fall back as a result, and one silver miner seems to agree. Pan American Silver’s quarterly report indicates that miners will look to mothball some of their less cost-effective sites. This would at least provide some source of upward pressure for the metal.

However, we are still looking at a continuation of the ongoing downtrend, unless something major changes. I suspect that tinkering with production levels won’t provide that upward pressure.

For now, the immediate target remains the late June lows around $18.60, with $18 just below it. 

Spot silver chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.