Silver investors are feeling the pain more than gold investors. With the metal falling as much as 5% today, is there a silver lining?
In the past year, has there been anything worse than holding gold?
Why, yes, it’s silver. And, it was down as much as 5% today.
Silver is down 37% this year alone. Since October, the metal has lost almost half of its value. It’s still double what it was in 2008. But, anyone who bought silver in the last two-and-a-half years probably isn’t happy seeing prices in the $18 per ounce range.
According to Reuters, the iShares Silver Trust (SLV), the largest silver ETF, saw 192 tons of outflow on Monday. Investors, it seems, may be losing faith in silver.
Is there a silver lining ahead or is the tarnish hard to get off the metal?
We ask CNBC contributor Steve Cortes, Founder of Veracruz TJM, and Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, to look at the fundamentals and technicals and decide if there’s ever going to be a shine to silver.
“Will Rogers said, ‘If you find yourself in a hole, stop digging,’” says Ross. “The problem with silver is that we’re still digging.”
“We are staring into the abyss,” says Ross, looking at its long-term charts. With a breakdown below an ascending triangle which began off silver’s highs in 2011, Ross believes it is now getting ready to test a major support level. “Wait, don’t anticipate, that move,” says Ross.
“If you look at any metals charts,” says Cortes, “those are charts only a mother can love. However, often when things look the very bleakest, it’s actually the time to buy. And, I do think that is the case in terms of silver.”
Cortes thinks silver miners are a way to play a potential upswing in the metal. “One of the reasons I’m so attracted to them right now is, because these stocks are so beaten up – the silver miners – you now get an incredible dividend yield.”
To hear more of Cortes and Ross analysis silver -- and to hear which mining stock Cortes thinks is a buy -- watch the video above.
- Commodity Markets