London (Mar 31) SILVER PRICES ended last week 2.4% lower from the Friday before, extending the precious metal's losses since new US Fed chief Janet Yellen hinted mid-month at raising Dollar interest rates sooner than previously expected.
The London Silver Fix on Friday was $19.71 per ounce, 84¢ lower on the week and only 44¢ off the low of 2014 to date.
May Silver Futures contracts, the most actively traded month on the Comex derivatives exchange, settled at $19.79 per ounce – some 52¢ down on the week but 63¢ off the low of the year.
Since March 19th, when Federal Reserve chair Janet Yellen implied rising rates in early 2015, the silver price
has now taken a significant drop, losing 7.6% from the week ending March 15th.
Because physical silver pays no interest, “The opportunity cost of holding gold and silver
may rise,” says Bart Melek, head of commodity strategy at TD Securities in Toronto, “and that removed a lot of impetus for people buying them.”
After rallying earlier this year, “Silver prices [are] consolidating as shorts pile in,” says a note from Standard Bank, noting the rise in open interest in Comex silver futures with bearish traders growing their bets.
Net of those bearish bets, speculative traders in US silver futures contracts last week cut their long position by nearly one half overall, data from regulator the CFTC showed Friday.
The run of mildly positive US statistics meantime continued, as Consumer Confidence came in higher and Initial Jobless Claims were lower than expected on the latest data.
Economic growth in China, the world's second largest consumer of silver behind the US, should be maintained at a “reasonable pace”
, said Premier Li Keqiang – taken by some analysts as a signal that Beijing is ready to take measures to stoke growth if the world's second-largest economy slows.
The quantity of silver bullion held to back shares in the iShares Silver Trust (ticker: SLV) ending the week unchanged at 10,165 tonnes, with total silver ETF holdings worldwide slipping slightly to 19,750 tonnes – equal to 80% of last year's global silver mining output.
The US Mint meantime reported sales of their Silver Eagles coins for the month of March at 4.476 million, an increase of one-third over the same month last year.
However total sales for US silver coins so far in 2014 are now 13.0 million, currently a decline of 9% from the same period of 2013.
Chart analysts at Canada's Scotiabank – owner of bullion market-maker Scotia Mocatta – now see near-term resistance in silver prices between $19.94 and $19.98 per ounce, followed by the 100-day moving average at $20.26.
Supporting current prices, the December 31st low at $18.83 remains a key level, Scotia says.