Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silvers Seasonal Price Swing

Commodities / Gold and Silver 2012 Oct 04, 2012 - 03:49 AM GMT

By: Anthony_David

Commodities

Best Financial Markets Analysis ArticleIt’s that time of the year again when it makes perfect sense to invest in silver. Based on data compiled over the last 20 years, silver prices are known to peak during April-May and then again towards the end of the year. Between May and October, silver prices reach a low and then plateau out. The price of silver has grown from around USD 3.66 per ounce in early January 1993 to a high of USD 48.7 per ounce in April 2011—an amazing increase of 1230%.


Silver prices normally follow gold prices and one can expect the seasonal rallies of silver to closely follow gold price rallies. It is pertinent however to note that in the last two decades, silver prices have seen more dramatic peaks and troughs when compared to the movement of gold prices. The reason for silver’s erratic price movements is that this metal has both investment and industrial demand often resulting in a conflict between the two. On the one hand the current industrial slowdown has impacted the price of silver, while on the other the price of silver is also driven by investment strategy, interest rates and the central banks’ moves to control inflation.

The chart in Fig. 2 was published by EquityClock.com and it shows the silver investment pattern over the last 20 years. The trend of buying silver in mid-September and selling in April-May in the last 10 years has yielded returns of about 33.78% .

Silver’s seasonal investment trend can be attributed to heightened buying spells during the Chinese New Year, Indian festivals of Akshaya Trithiya in April and Dhanteras in November, and to Christmas gifting and bullion coin releases for the New Year.

The charts (Fig. 3) for 2010 and 2011 show that silver made some of its most dramatic gains between September 2010 and April 2011. After the seasonal lows during May–July, silver prices rallied to levels of USD 42 per oz. during August–September 2011 before tapering off to lower levels at the end of the year. From September 2011 to March 2012 silver was actually down by 12.39%. One of the reasons for this poor performance was the major flood situation in Thailand which caused many of the country’s manufacturing facilities to be shut down. Thailand is the world’s largest manufacturer of electronic assemblies.

However, the recessional forces sweeping the US, the European debt crises and the general global economic depression haven’t dampened silver investment completely. Traditionally there’s more investment activity in gold, silver and precious metals during economic downturns. Industry pundits expect the demand for silver to reach new heights in Q4 of 2012 on the back of Thailand’s recovery from the flood disaster. There is also intense speculation that silver will outperform gold this year as the U.S. Federal Reserve and central banks across the world make stimulus moves to boost growth. This should get silver back on track to achieve the anticipated seasonal gains by April 2013.

Expect the industrial use of silver to grow in the coming years with the growth of green technologies and the mushrooming electronics industry. The industrial demand for silver could grow to levels that would seriously challenge the supply-demand balance which in turn could further impact the seasonal movement of silver prices.

By Anthony David

http://www.criticalstrategicmetals.com

The mission of the Critical Strategic Metals Web Site

is to serve as a monthly compass for those who take a fundamental view of investment regarding the Molybdenum, Manganese and Magnesium metals markets, are concerned with the emerging critical under-supply of these strategic metals to Western nations and wish to profitability chart their course. Each month we will research and provide, in as short and concise a manner as possible, the most applicable information available on resources that will have the biggest impact on our day to day lives. Click here to sign-up for our FREE monthly report.

© 2012 Copyright  Anthony David- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in