By Michelle Smith — Exclusive to Silver Investing News
The market tends to quickly return to focusing on other matters, such as US data, which has been largely positive. For example, on Thursday the US Commerce Department revealed that GDP rose at an annualized rate of three percent for the fourth quarter. Silver continues to refuse to play nicely with the US dollar - when one moves up, the other tends to move down.The European debt crisis seems to be re-emerging on the concern list for silver market participants, stealing some of the appetite for risk. China's economic outlook also remains an issue of concern, providing an ongoing drag. Investor sentiment The markets appear to be increasingly losing their taste for silver. ETFs continue to be net sellers of silver, dropping 30 tonnes of the metal last week. COMEX silver stocks, which are rising, are also a suspected cause of pressure on silver prices. The silver stocks are at their highest levels since October 2010. Open interest in COMEX silver stopped falling last week and saw some gains, but is still well below last year's average. Furthermore, net speculative length continued to fall, shedding another 213.6 tonnes last week. Standard Bank said this is largely due to a hefty increase in short positions - the largest seen this year. “The continued deterioration in long positioning, coupled with the strong pick-up in short positions, does indicate a market that expects further losses in silver,” Standard Bank added. A reduction of positions in India's silver futures markets was also reported last week. Market analysts blamed the reduction on speculators tracking the weak trend in overseas markets. The following of that trend has continued this week, with Multi Commodity Exchange futures contracts for May and July both down on Wednesday. The close May silver on the COMEX opened at $32.05 and was $32.24 at 2:40 PST. Spot silver closed up 0.22 in New York at $32.26.
The performance of silver mining equities was mixed during US trading, but appeared to be improving during afternoon Canadian trading.Company news United Silver (TSX: USC,OTC Pink:USCZF,FWB:UM8) commenced work on its $23 million four-year plan to further explore and develop the Crescent Silver Mine, located in the Idaho Silver Belt. The company announced that it has begun work on the Countess spiral ramp system ahead of schedule. As this the spiral is driven down, test exploration drifting will be conducted. Ore generated will be processed, and the concentrate will be sold to Formation Metals (TSX: FCO) under an existing agreement. United Silver expects that this operation will provide cash flow to offset the cost of exploration development. Also, while United Silver will continue to trade over the counter in the US under the symbol USCZF, the company announced it is discontinuing its relationship with OTCQX due to high costs and lack of volume. Securities Disclosure: I, Michelle Smith, do not hold equity interests in any of the companies mentioned in this article. Silver Responds to Fed, then Weakens from Silver Investing News