Silver Continues To Act Strong

Chris Flood and Delphine Strauss wrote an article in the Financial Times Silver surges on exchange traded fund hopes (subscription required).

Silver rose 7.9 per cent over the week to $9.56/$9.59 a troy ounce and dealers reported buying of March silver options at $12 on Friday.

“There is a serious risk that the silver price could ramp up by 25 per cent over the next couple of months, driven by supply concerns,” said Paul Merrick at RBC Capital Markets. With inventories low and falling, some fear an ETF could drive the market into a serious deficit.

I am certainly interested to see how this price movement in silver plays out over time. As I have stated recently, I believe liquidity helps all players in the silver. Barclay's ETF will help to increase liquidity.

As a matter of disclosure, I remain long Pan American Silver Corp. (PAAS).