Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Last week’s decision by the Fed not to raise interest rates lifted gold prices, but perhaps boosted silver prices even more. While gold rose 2.9% last Thursday, silver jumped 5.3%. This essentially lowered the gold-to-silver ratio, meaning that silver is gaining strength relative to gold.
This week, silver largely followed gold’s gains and losses after the terrorist attack on Brussels—gaining early Tuesday and then releasing those gains through the end of the week. However, silver prices are currently or will soon be influenced by factors that do not affect gold.
China’s manufacturing and financial crisis has led to a cutback in mine production for base metals. This affects silver because as miners unearth zinc, copper and lead, they also find silver. With a decrease in output of precious metals, the demand could cause silver prices to rise. 1
The London Bullion Market Association (LBMA) also decided this week to “enhance” the silver price in a series of changes to the LBMA spot price system. Certain changes in the way LBMA marks the silver price are intended to increase reliability of the price over time. 2
Silver responded negatively this week to the Federal Reserve’s indication that an interest rate hike could occur as early as April. Silver gave back around 60% of its gains from last week. The market was closed on Friday ahead of the Easter holiday.
Additional Sources:
1 – http://articles.economictimes.indiatimes.com/2016-03-22/news/71732799_1_silver-prices-china-crisis-weak-chinese-demand
2 – http://www.prnewswire.com/news-releases/cme-group-and-thomson-reuters-to-enhance-lbma-silver-price-benchmark-300239633.html