This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Silver Rallies In Q3, Starts Q4 Under Pressure

Silver Rallies in Q3, Starts Q4 Under Pressure

As silver limped into the third quarter (Q3), many market participants were desperate for fresh monetary policies from central bankers. Investors were mostly on the sidelines and prices were weak, bobbing above and below $27. By September, silver had again displayed its ability to outperform even gold and was working to post a close above $35. But the central-bank-related momentum quickly waned, leaving silver to enter the final quarter under pressure.

Silver spent a spent a significant portion of Q3 stuck in various ranges. At the end of July, the metal managed to break through resistance at the $28 level. It was only during the third week of August that silver was able to gain breakout momentum and move above $29.

At that time, there was a risk-on vibe in the equities markets. On record is a vow from European Central Bank (ECB) President Mario Draghi to do "whatever it takes" to save the euro. Spain had a bond auction that was considered successful both in terms of demand and rates. Further, minutes from a Federal Open Market Committee meeting seemed to indicate that the Fed was leaning toward a third round of quantitative easing (QE3).

Silver rose above $30 and kept going. The upward move was driven by pro-QE3 statements made by the Federal Reserve at the Jackson Hole Symposium. Further momentum was added when Draghi unveiled an unlimited bond-buying program. Finally, Federal Reserve Chairman Ben Bernanke announced the bigger-than-expected, long-awaited QE3, which involves the central bank spending $40 billion per month on mortgage-backed securities.

Q3 revealed notable contrasts among investors. In the COMEX futures market, for example, there was a strong build-up of net speculative length. Over 900 tons were added during the final week of July, the heftiest increase since February, and additions continued throughout the quarter. But this bullish drive on the speculative side brought into focus the fact that commercial players were taking the opposing position and heavily stacking up short positions.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.03 -2.90%
FB $117.50 7.90%
GOOG $691.20 -2.10%
TSLA $247.54 -1.60%
YHOO $36.58 -1.00%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs