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Silver Market Displays Mixed Reactions to Greek Debt Deal

Posted on 2012-11-05, By A-Best Staff
By Adam Currie — Exclusive to Silver Investing News

Silver Market Displays Mixed Reactions to Greek Debt Deal

Silver prices remained steady over the week, strengthened by the news that the Greek government, in need of $14.5 billion to make bond payments on March 20, was able to reach a deal approving austerity measures.

“Most markets are still overextended and may be entering a ‘buy the rumor, sell the news’ type of mode now that the Greek issue is entering its final stages,” said Edward Meir, metals analyst at INTL FCStone.

According to an Australian media source, money managers in gold, silver, and copper futures and options raised their net long positions in the week of February 7 as investor interest in the three major metals continued to recover after a recent disappointing performance.

Silver prices closed Thursday at $33.42 per ounce, while prices for March delivery edged up 16 cents, or 0.48 percent to $33.54 an ounce.

Against the norm

It was interesting to note that while the number of firms that are raising gold and silver price forecasts has recently trailed off, one of the majors commented that it was hiking its estimate.

For silver, BNP Paribas increased its 2012 estimate to $37.50 from $36.75, and in 2013 to $52.00 from $49.75 per ounce. Over the four quarters of 2012, the firm predicted silver will average $31.90, $34.95, $39.30, and $43.80, respectively.

As reported by IBTimes, BNP analyst Anne-Laure Tremblay wrote “Silver tends to be driven by two main factors: the gold price and risk appetite.”

“When both show a positive momentum, silver tends to outperform gold,” she continued. “Looking ahead, the gold/silver ratio could see further episodes of decline but given our central scenario for further limited and episodic bouts of risk aversion, we expect the gold/silver ratio to remain on the whole stable in the first half of 2012 from its current level.”

Jim Wyckoff of Kitco News wrote a summary on silver’s near-term technicals, stating  ”March silver futures prices closed near the session low Wednesday and scored a mildly bearish ‘outside day’ down on the daily bar chart. Silver bulls still have the overall near-term technical advantage.”

He went on to add that “Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the February high of $34.52 an ounce.”

Company news

Hecla Mining Company (NYSE:HL) reported an increase of its silver reserves and resources, as of December 31, 2011. Hecla increased its silver reserves by four percent to 148 million ounces and its resources by 13 percent to 281 million ounces. The news is the company’s largest reserve and resource increase to date.

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