Silver Bounces Back Following Midweek Price Drop

Silver Bounces Back Following Midweek Price Drop

Though silver ended Thursday at $21.70, not far from its Monday closing price of $21.73, US government turmoil pushed the white metal down on Tuesday and Wednesday.

Silver saw little price action on Monday, moving between $21.58 and $21.99, its high for the week. Standard Bank notes in its report for that day that like other precious metals, silver was kept range bound as a result of uncertainty about whether the US government would be able to sort out a plan for how to cut government spending.

Divided over the Affordable Care Act, widely known as Obamacare, the government did not arrive at a solution, and on Tuesday partially shut down for the first time in 17 years. Though silver sunk to $20.77 that morning, by the afternoon it had risen to $21.25, continuing up to hit $21.87 Wednesday morning. Writing for Bloomberg, Glenys Sims suggests that the increase may have been due to increased "demand for a protection of wealth on concern that the impasse may endanger the recovery in the largest economy."

Though the white metal fell as low as $21.52 on Thursday, as mentioned, it ultimately ended the day at $21.70.

Standard Bank states in its October 1 report that the market is now looking toward October 17, the day that the US Treasury is likely to hit the debt ceiling and be unable to borrow further.

Texas nixes silver sales tax

In other US news, Mineweb reported that Texasaremoved its sales tax on purchases of gold, silver and platinum bullion and numismatic coins as of October 1.aPreviously those living in the state had to pay a 6.25-percent tax on precious metals purchases under $1,000.