It Remains To Be Seen What Silver Prices Will Do This YearBy Debra Wilson on January 20, 2011, 10:22 am
In 2011, silver prices will continue to witness a rise but sharp gains may be restricted on account of expected growth in mine supply. A general tendency with miners is that sharp rise in metal prices leads to growth in production. Apart from silver being produced as primary production, the metal is often found as a byproduct of other metals like gold, copper, zinc and lead. Hence, further rise in prices is expected but growth in production at the same time would restrict supernormal gains.
It remains to be seen if the price action in the US dollar, precious metals and the miners really means much of anything. However, it would be foolish to ignore the price action in the metals and the US Dollar Index. The divergence from the norm could be a warning that gold and silver are about to go through a correction. The price action in GDX would be supportive of that conclusion and the dollar trading down near a support level where a bounce higher is likely also pointing to potentially lower prices in the precious metals complex.
Trading On COMEX Markets
This analysis only shows the impact of trading on the COMEX markets. It does not reflect activity in the London market nor the effect of trading gold and silver paper contracts and derivatives. The paper markets trade in far higher volumes than the physical market. Ultimately, however, the paper markets must react to physical market supply shortages and surpluses. If the major banks that are shorting the COMEX gold and silver markets are now closing out such positions, this is happening because these businesses anticipate higher prices in the future.
American Silver Eagle
The American Silver Eagle Proof & Bullion coin are in high demand. With Silver breaking $30 an ounce last December and current forecasts projecting Silver to hit $40 an ounce in 2011, demand for American Silver Eagle Coins has greatly increased. Demand for the coins is so strong that sales broke records in November 2010, exceeding sales in December 1986, the year the coin was first introduced.