Silver Price Reverting to Pre-Summer Levels

Silver Price Reverting to Pre-Summer Levels

The summer months are often a quiet time for the resource sector, with many market participants taking the old adage "sell in May and go away" to heart. As a result, investors tend to look forward to September, when prices and market activity typically pick up.

Unfortunately, this year that pattern simply hasn't held true for silver — in fact, quite the opposite has happened.

A quick glance at a the metal's activity from May until now (see below) shows that it ended May at $18.81 per ounce, then proceeded to move upward throughout the summer, hitting a high point of $21.44 midway through July. Since then, silver has been on a steady decline, today sinking as low as $18.88 — essentially right back where it was three months ago.

Image courtesy of Kitco.

Silver's unseasonal price rise isn't surprising given that the summer brought tension regarding conflict between Ukraine and Russia and in Iraq — after all, as a safe-haven asset, silver is a magnet for investors when geopolitical uncertainty hits. The current downward movement is also unsurprising given that the US dollar is currently on a tear.

That said, silver's unusual behavior certainly has investors wondering what's next for the white metal.

While longer-term predictions are scarce, Kitco's Jim Wyckoff suggested Wednesday that silver bulls' next upside price breakout objective is "closing prices above solid technical resistance at $19.50 an ounce." Meanwhile, Julian Phillips states in a post for GoldSeek that the white metal is "waiting for gold to give direction."

Silver closed today at $18.95.

Junior company news

El Tigre Silver (TSXV:ELS,OTCQX:EGRTF) on Tuesday announced "strong" assay results from the year-round exploration program at its Mexico-based El Tigre silver and gold project. Assay results from four samples of underground backfill material from the Southern vein area ranged from 1.28 grams per tonne (g/t) gold to 4.32 g/t gold and 262 g/t silver to 468 g/t silver.