There has been an upbeat vibe in the silver market this week. On the first day of trading, the metal rose above $31, and with a string of consecutive daily gains has managed to remain above that level and inch toward the bull camp.
These gains are by no means an indication that the silver market was free of pressure factors. Potential pitfalls were seen on several occasions. For example, Empire State Manufacturing Survey data, which according to Financial Sense missed estimates and thus reflects a decline in business conditions, weighed on the metal during trade Tuesday. But silver shook off the negativity and ended the day at $31.32, a gain of $0.29.
On Wednesday, a range of industrial metals, such as copper, zinc and lead, all suffered on news of a decline in foreign investments in China and a downgraded forecast for global economic growth from the World Bank. Silver silver spent a significant part of the US session in negative territory, but rose to close the day with $0.12 in gains.Net speculative length of COMEX silver has seen a sharp decline over the past several weeks. The latest Commitment of Traders report reveals an erosion of over 164 metric tons, with a hefty liquidation of longs. Despite the skepticism that seems to suggest, Standard Bank managed to find an upside: the market is now less strained, with longs and shorts both returning to normal levels, the firm said in a report. The US Mint reported that silver coin sales have already exceeded 5 million ounces this month. At that rate, sales could surpass the all-time monthly high of 6.1 million ounces set in January 2012, said Reuters. But not everyone is confident that this appetite will be sustained. Some have pointed to the possibility of demand softening in upcoming months as January is considered a strong month for coin sales.