Silver Market Displays Mixed Reactions To Greek Debt Deal

By Adam Currie — Exclusive to Silver Investing News

Silver Market Displays Mixed Reactions to Greek Debt Deal

Silver prices remained steady over the week, strengthened by the news that the Gr eek  g overnment, in need of $14.5 billion to make bond payments on March 20, was able to reach a deal approving austerity measures.

"Most markets are still overextended and may be entering a 'buy the rumor, sell the news' type of mode now that the Greek issue is entering its final stages," said Edward Meir, metals analyst at INTL FCStone.

According to an Australian media source, money managers in gold, silver, and copper futures and options raised their net long positions in the week of February 7 as investor interest in the three major metals continued to recover after a recent disappointing performance.

Silver prices closed Thursday at $33.42 per ounce, while prices for March delivery edged up 16 cents, or 0.48 percent to $33.54 an ounce.

Against the norm

It was interesting to note that while the number of firms that are raising gold and silver price forecasts has recently trailed off, one of the majors commented that it was hiking its estimate.

For silver, BNP Paribas increased its 2012 estimate to $37.50 from $36.75, and in 2013 to $52.00 from $49.75 per ounce. Over the four quarters of 2012, the firm predicted silver will average $31.90, $34.95, $39.30, and $43.80, respectively.

As reported by IBTimes, BNP analyst Anne-Laure Tremblay wrote “Silver tends to be driven by two main factors: the gold price and risk appetite.”

“When both show a positive momentum, silver tends to outperform gold," she continued. "Looking ahead, the gold/silver ratio could see further episodes of decline but given our central scenario for further limited and episodic bouts of risk aversion, we expect the gold/silver ratio to remain on the whole stable in the first half of 2012 from its current level."

Jim Wyckoff of Kitco News wrote a summary on silver's near-term technicals, stating  "March silver futures prices closed near the session low Wednesday and scored a mildly bearish 'outside day' down on the daily bar chart. Silver bulls still have the overall near-term technical advantage."

He went on to add that “Bulls' next upside price breakout objective is closing prices above solid technical resistance at the February high of $34.52 an ounce.”

Company news

Hecla Mining Company (NYSE: HL) reported an increase of its silver reserves and resources, as of December 31, 2011. Hecla increased its silver reserves by four percent to 148 million ounces and its resources by 13 percent to 281 million ounces. The news is the company's largest reserve and resource increase to date.

Junior company news

Abcourt Mines (TSXV: ABI), an exploration and development company with properties in Northwestern Canada, saw its shares soar during the week after it claimed to have intersected a "very high grade" silver zone in the Western part of the Abcourt-Barvue ore body, located north of Val d'Or, Quebec.

According to a press release, drill results showed that the average grade ranged from 240.0 meters to 244.70 meters at 1,386.16 grams of silver per tonne (g/t Ag). This included a section of 1.30 meters with a grade of 4,696 g/t Ag.

"Our drilling program continues to give excellent results in the main zone of mineralization," said President and CEO Renaud Hinse. He added "We are getting good grades and good widths. The above results with those reported previously are adding to our reserves and resources."

Silver Bull Resources (TSX: SVB,AMEX: SVBL) announced assays from the Shallow Silver Zone of its Sierra Mojada project in Coahuila, Mexico.

It received results from 62 diamond core drill holes into the Shallow Silver Zone, equating to 11,024 meters of the 36,800 meter drill campaign completed in 2011.

Highlights included 80 percent of the drill holes intersecting zones of silver oxide mineralization of over 30 g/t Ag, including 144 g/t Ag over 31 meters, 109.3 g/t Ag over 12.55 meters, and 89.4 g/t Ag over 36.25 meters.

Tim Barry, President and CEO of Silver Bull, stated: "We are extremely pleased with the continued positive results coming from the Shallow Silver Zone." The company is "also highly encouraged by the thick high grade zinc intercepts we are also intercepting towards the eastern end of the Shallow Silver Zone and look forward to publishing a resource update on both the silver and zinc in the second quarter of 2012.”

Cayden Resources  (TSXV: CYD) announced assay results from drilling completed at the Quartz Mountain property near Fallon, Nevada. The company's program had been targeting an area of historic silver-lead-zinc production.

According to a press release, the 16 holes assayed to date tested over 350 meters of strike length of the Quartz Mountain mineralized system, with the majority encountering greater than 30 g/t Ag, and in excess of 1 percent combined lead and zinc.

Cayden's President and CEO, Ivan Bebek, commented that 2012 "is going to be a very eventful year for Cayden, as the company will be aggressively exploring both our Morelos Sur and Quartz Mountain properties throughout the year. We expect to be delivering significant results from the exploration programs in the coming months."

 

Securities Disclosure: I, Adam Currie, hold no direct investment interest in any company mentioned in this article.

 

Silver Market Displays Mixed Reactions to Greek Debt Deal from Silver Investing News

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