Silver headed into the weekend with gains and emerged to begin this week in a similar fashion. By Tuesday, silver's closing New York spot price was $29.43. That was the first time the metal had closed above $29 since February 19; since then, it has not happened again. On Wednesday, silver gave up all the previous day's gains, falling to $28.98. As of Thursday, the metal had declined 9.15 percent in 30 days. Some market participants believe that silver is approaching oversold territory, if it is not there already.
There has been significant concern within the silver market about the longevity of quantitative easing. Dovish statements this week from Fed Chairman Ben Bernanke seemed to assure market participants that the flow of easy money will not be cut off any time soon. Silver prices rose in response, but not for long.
As has been the case lately, when silver makes gains, it quickly gives them back. The metal simply cannot seem to find a positive role in this environment, which features investors who are flocking to risk.With the threat of sequestration in the US approaching, there has been chatter this week that suggests some are concerned that the spending cuts will weigh on silver prices. Apart from that, there appears to be limited focus on the metal's supply and demand fundamentals these days. For example, on Monday, Hecla Mining (NYSE: HL) announced that its 2012 results indicate that it has achieved a seventh consecutive year of reserve and resource growth. Its silver reserves climbed 2 percent, to 150 million ounces, the highest level in the company's history. Mineralized material increased 7 percent, to 22.4 million tons averaging 5.7 ounces of silver per ton. Hecla is expecting 2013 silver production to increase over 25 percent, to as much as 9 million ounces. First Majestic Silver (TSX:FR,NYSE:AG) likewise announced that 2012 marked its ninth consecutive year of silver production increases. The company produced 8.26 million ounces of silver. Pushing for a 10th year of growth, the company expects production of 11.1 to 11.7 million pure silver ounces in 2013.