As I write this article, I note that on Kitco shows silver prices up $0.17 to bid $14.38 ask $14.48. Silver prices certainly have been volatile. I have no idea how the metal or Pan American Silver Corp. (PAAS) will trade this week. I believe that silver prices will work higher over time, perhaps over $20 by year-end. The stock price of Pan American has been lagging the silver price. I am guessing that the lagging is a result of the uncertainty in Latin America. After the Peruvian election, we will know more.
For those interested about iShares Silver Trust (SLV), you can click on the link to see how much silver is presently in trust. According to the website, as of 12 May 2006, iShares held about 65 million ounces of silver in trust, or nearly $1 billion worth. Given the short period that iShares Silver Trust has been available, that is a remarkable amount of silver in trust.
I am also watching the U.S. dollar. Recently it has been soft, and currencies tend to have a lot of momentum. Once a currency begins to drift upward or downward, it will often continue along that path and overshoot. Should the U.S. dollar continue to falter, this movement might spur further investment in precious metals as investors and speculators seek a safe haven while readjustments are being made. And, of course, the geopolitical turmoil contributes to the general uncertainty.
Because of the weakness in the market late last week and the general uncertainty, this coming week should be interesting.
As a disclosure, I remain long Pan American Silver Corp. stock.
Leave a comment