Silver Price Jumps to 2010 Peak
Source: Silver Investing News, Leia Michele Toovey (5/4/10)
". . .flight from paper currencies could provide tremendous upside to silver."
Concerns that Europe's strides to keep Greek debt in check would fall flat permeated the global markets. The resulting dive by stock indices and high market volatility drove investors to safe-haven investments, including silver.
Silver has enough momentum to resist downside from the latest announcement that Mexico would ramp up silver production. With the market focused on the long-term outlook, recent trends in physical supply have had limited influence on current day prices.
For the July contract, the metal is getting critical support at $18.595, a level analysts say could drop to the $18.50 level if the greenback holds its strength and the U.S. equity market turns negative. In the near term, the largest risk the silver market faces is a mass liquidation. In order for this to happen, the U.S. equity market would have to be on the brink of collapse, and the Eurozone crisis would have to worsen. Last night when fears over the Eurozone hit the markets, a significant decline in stocks of 1.2 million ounces happened overnight. Upon market opening, silver still held support at $18.55 an ounce.
The opposite, optimistic outlook is just as likely to hit the silver market. Many analysts claim that a corresponding flight away from debt-laden paper currencies could provide tremendous upside to the silver market.