Summer's Silver Buying Opportunities


"The dreaded summer doldrums dole out opportunity."

Analysts advised silver investors to be prepared for a week of strong volatility as the markets decide whether to take direction from worries over eurozone debt or the slowing global economy. Tuesday, silver futures dipped as low as $17.50 before rebounding on bargain buying to close at $17.70/oz.

The Dreaded Summer Doldrums Dole Out Opportunity

Long-time silver investors know this isn't the best time of year for precious metals (PMs), as gold and silver prices trade sideways to lower, hitting bottoms by mid-August.

Looking at silver's seasonal charts over, last month Zeal Analyst Adam Hamilton forecast silver "trading in the mid-$17s by late August." It's nearing the end of July and it's already grazing that range.

Silver's plummeting prices over the past few weeks have no doubt given many silver investors cause for concern, particularly those with stakes in silver producers suffering share-price drops along with the metal's futures price.

The summer doldrums offer a ray of sunshine to investors, as August is the perfect time of year to bargain shop for physical holdings and mining stocks, as Hamilton points out PM stocks during this time period "typically fall to their lowest relative levels of any given year." Once the fall begins, PM prices begin to recover from their lows as the buying season resumes in many regions of the world.

Most analysts still hold an optimistic outlook for silver prices over the next few years. VM Group's latest metals review sees silver prices holding steady throughout Q310 with the potential to advance in Q410. The consultancy firm is bullish over the medium to longer term, especially if industrial demand for silver picks up as expected, and views $20/oz. silver as a strong possibility in H111.

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