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LATEST NEWS ABOUT SILVER PRICES AND MARKETS

Tuesday, May 22, 2012

Finding a Floor for Silver & Silver Miners | Resource Investor

Finding a Floor for Silver & Silver Miners | Resource Investor

www.TheSilverPrice.info


Since silver reached our target of $50 last year it has been in a treacherous downhill descent. The depth of the decline in precious metals is approaching 2008 levels, and many mining stocks are at 2009 price levels. While it has been painful for bullion investors, it's been even more disastrous for silver miners and their investors. Now we must revisit our analysis to determine if silver and miners are near their trading floor.
We've seen a lot of bearish reports on silver including a comparison to the Nasdaq bubble crash, which overlays a projection of silver to continue falling to the $6-$8 range. Is it possible for silver to reach or hold at those levels?
 
Using earnings data for PAAS, SSRI, EXK, and AG from the first quarter of 2012, we divided earnings by actual silver produced, giving credit for gold and other base metals, in order to determine the actual break even cost of production. Gold sales averaged $1,700 and silver averaged $33 for the first quarter. Despite this SSRI wasn't profitable. EXK had the lowest breakeven point of $14.68 per ounce of silver, followed by AG at $18.33 and PAAS at $23.87. The average breakeven production cost was exactly $24 per ounce. Even excluding SSRI, the average was $21.50. Over the past 11 years, silver has risen by nearly 10 fold; however production costs have almost risen just as much. Silver's price is approaching its long term cost of production level, and given the depletion of silver stockpiles of the last 3 decades, we don't anticipate silver's price holding below that level for long – if at all. If you're somehow able to buy silver for less than $21.50 to $24 an ounce we'd argue that miners are literally paying you to buy it. Given that over the long run miners need a healthy profit margin as an incentive and buffer against their depleting resources, we'd argue that $26 to $30 is the long term nominal floor for silver.

Investor Guide: How To Buy and Trade Silver Prices (NYSEARCA:SLV, NYSE:JPM, NYSEARCA:SIVR, NYSEARCA:AGQ, NYSEARCA:ZSL) | ETF DAILY NEWS

Investor Guide: How To Buy and Trade Silver Prices (NYSEARCA:SLV, NYSE:JPM, NYSEARCA:SIVR, NYSEARCA:AGQ, NYSEARCA:ZSL) | ETF DAILY NEWS

www.TheSilverPrice.info


Larry D. Spears: In late December, silver dipped to a 12-month low near $26 an ounce, and traders who responded to the barrage of “buy” recommendations were quicklyrewarded as the metal soared to a high of $37.18 just two months later.
Today, silver has pulled back below $29 an ounce, giving investors another chance to establish a position before the metal makes its next move higher.
After all, the fundamental case for silver prices remains as strong as ever.

Silver Institute to release China market report | ProfessionalJeweller.com

Silver Institute to release China market report | ProfessionalJeweller.com

www.TheSilverPrice.info


The US-based organisation The Silver Institute has been commissioned to write a report on the Chinese silver market, with a focus on the growing importance of China in the global silver industry, emerging trends and their potential market impact.
The report will be produced by The Silver Institute in partnership with precious metals consultancy group Thomson Reuters GFMS and will be published in October 2012.
A release from The Silver Institute said: “Twenty years ago China accounted for some 3% and 5% of global silver demand and supply, respectively. In 2011, according to World Silver Survey 2012, those figures climbed to 16% and 14%, making China the world’s second largest consumer and third biggest producer of the white metal.”

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