Price of Silver in 2014: How It Could Buck Gold's Downtrend
San Francisco (Dec 29) This has been a horrific year for silver, with spot prices dropping close to the $20 level and shares of the iShares Silver falling by more than a third. Many silver miners have plunged even further. Yet even with many expecting further drops in gold prices, investors are wondering whether the price of silver in 2014 could actually buck gold's downtrend and move higher. Let's take a look at some of the factors that hurt silver in 2013 and see if they're likely to weigh on the price of silver in 2014 and beyond. Where's the price of silver in 2014 headed?
As with gold, the Federal Reserve and its decisions on monetary policy will play a huge role in determining the direction for the price of silver in 2014. Although the declines in precious metals in April weren't necessarily linked closely to the Fed's prospective moves, silver prices definitely fell further in June when the Fed first started discussing its eventual tapering of its bond-buying activity under quantitative easing. With as interest rates rise, income-producing bonds look more attractive compared to non-income-producing bullion investments like silver, and some worry that will push investors out of the silver market and cause the price of silver in 2014 to fall further.