Coming off the Christmas holiday, silver edged higher on Thursday as investors covered short positions and hunted for bargains during what has become a month-long downward trend for the precious metal.
Trading was thin, with investors keeping a close eye on White House-Congress talks aimed at preventing the US economy from plunging into recession in 2013. On Wednesday, John Boehner, Republican House of Representatives speaker, urged the Senate to act to pull back from the so-called “fiscal cliff.”
The United States faces $600 billion in tax hikes and spending cuts beginning in January unless a deal is reached to either replace or delay them.Spot silver rose to $30.40/oz, up 1.32 percent on the day's opening price, before settling at $30.18. Silver for March delivery last traded up $0.17 at $30.20 an ounce (oz). Investment through silver exchange-traded products reached a record high of 18,854 metric tons last month — more than nine months of global mine output — according to data compiled by Bloomberg. Holdings are currently valued at approximately $19.2 billion. Silver recorded a positive year, lagging behind only platinum in gains for precious metals. While that might please bulls, the metal's price swings over the past quarter cannot be ignored. Silver's 100-day historical volatility is almost twice as high as that of gold, meaning investors have been subject to high-risk investments. The metal advanced 7.7 percent, to $30.40 per oz, throughout the year — a gain on the 5.4-percent increase recorded by gold. Company news Pan American Silver (TSX:PAA) suspended work on its Navidad silver project in Argentina's Chubut province due to the local government's failure to pass a regulatory plan for mines and a proposed bill that is likely to cause sharp tax rises across the sector.