Gold isn't the only precious metal dropping this year. Silver is down more than 25% in 2013. But is there a silver lining?
Silver is down more than 26% compared to gold’s drop of 17.5%. Recent data from the US Commodities Futures Trading Commission (CFTC) show that hedge funds and other managed money traders are almost as short the shiny metal as they are long. The ratio of long to short positions in silver among managed money is nearly 1-to-1. One month ago, that ratio was 1.5-to-1. Compare that gold, where managed money’s longs outnumber shorts about 1.5-to-1 now but were more than 2-to-1 last month.
Meanwhile, along with cutting its forecasts on gold and other metals, analysts are also slicing with silver. Bank of America’s analysts now predict silver’s 2013 price average will be down to $24.35 per ounce versus its previous estimate of $32.70. JPMorgan Cazenove in the UK cut its silver views as well from $30.01 per ounce to $27.89.
Are things looking bleak for the sterling or will it shine again? We ask Talking Numbers contributors Richard Ross, Global Technical Strategist at Auerbach Grayson, and Richard Ross, Global Macro Editor at RiskReversal.com, to give their take on silver.