Price action in the silver market has been brutal. A week ago, the metal was struggling to stay above the $31 mark. Since last Friday, silver has been fighting to recover from price slashing that has taken it to increasingly low levels, preventing a single close above or even at the $30 level. One major decline came as silver headed into the weekend. Even as gold was overcome with pressure early Friday, silver bulls put up a fight that initially helped support the white metal. However, by the day's end, the battle was lost and March silver touched its lowest level since January 4. Silver on the New York market was chopped down to a closing price of $29.80, posting losses of $0.60. The Commitment of Traders report for the week ended February 12 reveals that net speculative length dropped 664 metric tons (MT), the largest decline this year. Part of the drop resulted from nearly 380 MT lost as longs unwound their positions for the second week in a row. On the opposite side of trade, shorts added 285 MT, the largest addition seen since July 2012. The underlying moves show a market that is particularly keen to get out of silver, Standard Bank said. On Monday, silver saw some short covering and bargain hunting, and with that initial bounce, silver prices were seen around $30 intraday. To maintain that level, silver needed something to seize upon, but this supportive development was not forthcoming and prices declined, paving the way for further weakness. COMEX March silver hit a six-month low on Tuesday. On the spot market, the metal lost $0.54 for the day and closed at $29.44.
That downward move was exacerbated Wednesday by the release of the minutes from the Federal Reserve's January meeting. It is no secret that there has been division within the Fed about the handling of quantitative easing. But the market deciphered intensified concern from the latest release, a sign that there is greater risk that loose money programs will be retracted sooner than some players would prefer.Silver lost $0.88 and closed at $28.56 on Wednesday. Commerzbank said normal trading volumes were surpassed by a good 160 percent. On Thursday, there was a lot of market chatter about sentiment and losses. Many suggested that market participants had overreacted, especially since further consideration of the Fed's policies is on the agenda of the upcoming meeting in March and more clarity will likely be available thereafter. The close Silver managed to fend off further price slashing and post small gains on Thursday. March silver on the COMEX ended the floor session near the high, gaining two pennies to finish at $28.64. Silver gained $0.12 on New York spot market for a close of $28.68. Company news Hecla Mining (NYSE:HL) has resumed operations and production at its Lucky Friday mine in Idaho, US. The company said it spent $29.8 million rehabilitating the silver shaft and another $26.2 million on other capital projects at the mine during the down time. Now back in action, Hecla is expecting the mine to produce 2 million ounces of silver this year. Orko Silver (TSXV:OK,OTC Pink:OKOFF) said First Majestic Silver (NYSE:AG,TSX:FR) did not match Coeur d'Alene Mines' (NYSE:CDE,TSX:CDM) superior bid for the company. Orko is now in the process of terminating the agreement with First Majestic and entering into another with Coeur. Sunset Cove Mining (TSXV:SSM) discovered a seventh adit at its Carolay silver polymetallic property in Peru. "The discovery of this new adit with apparent polymetallic mineralization during our exploration is very encouraging," said Lorne Woods, president and CEO of Sunset Cove. "Its discovery means that the Carolay Vein system has been traced over several kilometers in length and now over several hundred meters of vertical extent and is proving to be an extensive mineralized system."
IMPACT Silver (TSXV:IPT,OTC Pink:ISVLF) announced that its Cuchara-Oscar mine in Mexico is now in production. The average silver grade at the mine is anticipated to be 270 grams per MT in 2013. This latest development makes the fourth underground silver mine in the Zacualpan district that the company has moved from discovery to production.Securities Disclosure: I, Michelle Smith, do not hold equity interest in any companies mentioned in this article. A Week of Brutal Price Action for Silver from Silver Investing News