Silver closed in New York today up over 5% at $23.01 an ounce, the highest level since May. Silver hit intraday highs of nearly 6%. This week’s strong performance by silver has pulled it into a bull market, up 24% over the 34-month low hit on June 27. Today’s performance caps the best seven-day rally in silver since October 2008, a time when finacial markets were imploding in the aftermath of Lehman Brothers’ collapse. Bloomberg reports that silver ETFs rose yesterday to a record 19,890 metric tonnes, and are up 5.1% for the year, which has also boosted silver sentiment.
Precious metals had made notable gains in overnight trading Wednesday night, which was halted this morning after first-time jobless claims shocked everyone by showing a 15,000 person decline. This gave the languishing dollar a big boost, depressing metals. However, the dollar’s day was short-lived, with the DXY dollar index falling .68% for the day. Stocks also swooned, despite good economic numbers, or perhaps because of them, as traders fear the imminent end to easy money when the Fed starts winding down its $85 billion a month in bond purchases.
Bloomberg quotes Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, as saying “We are seeing money flow into precious metals from stocks today. The weakness in the dollar is also a big support.” Reuters quotes Axel Merk, chief investment officer of Merk Funds, as saying “Today’s move was mostly driven by technicals, and that spooked the bearish bets out of the market.” In addition to silver’s sterling performance, gold staged a $50 rally after the morning dip.
Experts warn though, that with summer trading volumes so light, what the market giveth, the market can very well taketh away.