THE STATE OF METALS 2016: SILVER

This is the second post in our four-part series looking at how the precious metals produced by the Australian mining industry have performed over the year to date, from a finance and commodity perspective – using June as a snapshot. Our first post in the series examined the extraordinary surge in the gold price during June. So with silver generally outperforming gold in a strong bull market, what did silver do?

SILVER SETS THE SCENE FOR A LONGER-LASTING TREND IN GOLD

In June, silver out-performed May for absolute strength, but not for the overall range, with a 17 percent rally for the month.

In Australian dollar terms, the price rallied 13.60  percent, from $22.11 to close the month at $25.12, very close to the high of $25.25., right on the monthly cloud base, which it has since penetrated.

What is notable is that silver generally outperforms gold when gold is in a strong bull market, and vice-versa, so the silver price performance could indicate a longer-lasting uptrend in gold, but who is confident enough to make iron-clad commodity price predictions in the current uncertain climate?

The Volume-weighted-average price through June was US$17.57. The month started by continuing the liquidation that began in May, but between June 7 and June 21. almost 98 million Tozs of metal sold off. The week of the ‘Brexit’ referendum actually saw a slight outflow.

There was also reports of significant buying from China towards the end of the month and Global ETFs saw 4.355 million Tozs of buying throughout June.

 
State of metals 2016 Silver

HIGH PRICES CAN TRIGGER MARKET CORRECTIONS

With uncertainty playing the lead role on the world political stage, it is possible that June marks the highpoint for silver – for the time being. Given that silver can fall like a stone at the first hint of a sell-off, many metals experts are advising caution with a reminder of previous bull market corrections.

Next time, we’ll be looking at the state of platinum in our four-part series about the state of metals and then finally, the fourth post in the series will deal with the lesser known metal, palladium.

At Resolute Equipment, we’re used to the ups and downs of the mining industry in Australia and the role the global economy plays in our own precious metal mining in Australia. As a leading provider of quality new and used mining equipment, we have a range of mining equipment for sale that includes all the big names you expect, such as CAT, Komatsu and Hitachi. Contact us today for a great deal on quality mining equipment.