November 2011 Silver Report

Even we were a little disheartened by this month’s steady decline in the price of silver. It spiked here and there throughout November, but the overall theme was one of a downturn through the wet, grey month of Remembrance. But why? What caused silver to go down over two dollars an ounce overall with many sudden drops in price? Were things drastically different than October?

Generally speaking, the reason was a waning trust in the ability of silver to remain useful in the future. Many people are uncertain of the role silver will play in industry over the next year and whether any mining corporations are going to go through properly or not. As a result, investors are less likely to invest in mining which in turn will cause people to feel shakier about silver. Another reason for the weakening of silver was the strengthening of the dollar and greenbacks. When dollars become stronger, the price of silver and gold fall because people no longer buy as much of it for their portfolio.

Silver Week by Week

Silver prices started on a high note of about $32.00/oz and rose to $33/oz in the early days of November. However, the bumps immediately began with silver jostling around $34.00/oz. Then a spike to $35.00/oz had silver investors breathing a sigh of relief… or rather, a final gasp of air before the bumpy ride down. Over the next two weeks in November, silver would drop from $35.00/oz down to $31/oz in the space of about 12 days. Prices slowly recovered a little before plummeting again to just over $31.00/oz. Then price spiked to $32.00/oz and dropped back to $31/oz…. get the picture? By the end of November, silver had ended at $31.73/oz; about where it started but with a whirlwind between the beginning and the end.

Messages in November

Overall, the message of November was a lack of faith in silver and thus a lack of demand. No one was bothering to buy silver, no one quite understood the point of silver and so no one wanted it. Are you screaming yet?

It’s ok. Long term investors are still confident that silver will reach at least $38/oz and shouldn’t sink lower than $20/oz. While this isn’t an exciting stretch of money, it’s still healthy and respectable, considering the sagging interest in silver right now. With the price still recovering you may be able to get your silver for a lower price which means higher profits later on.

Is it time to bail? Well, silver has always been a volatile investment, one of the most volatile around. Drops and rises in price are not only normal, but expected by those who have been investing in precious metals for a while. Furthermore, the end of November saw a rise in silver prices again and into December, we continue to see that slight rise. Now part of that could just be Christmas shopping, but it’s still encouraging for silver investors.

Patterns?

If we look at the broader strokes from the past three months, we can see that there has been a pattern up highs, sudden lows and then up again. November may well have just been another low before another high. So, if we base things on this pattern, maybe now is the time to bolster your silver stocks a bit and wait for the prices to rise again. Hey, it’s silver and silver, while volatile in its own price, has always been stable in that it has decent prices and what more can an investor ask for?

Don’t let November scare you just yet; prices are slowly recovering and there are high hopes for silver prices getting back up to $38.00/oz and beyond into the new year.

Look for us again at the end of the holiday season when we will see: Is all that glitters gold? (or, silver as the case may be)?

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Related posts:

1. October 2011 Silver Report
2. September 2011 – Silver Report