Has Silver Bottomed Down?

The price of silver tumbled down during last week. The FOMC’s decision to taper again its asset purchase program has pressured down the price of silver. Looking forward, will silver recover from its recent fall? Let’s analyze the recent news that may affect silver and the silver ETFs.

The recent decline of silver has reflected in the drop in demand for silver ETFs such as iShares Silver Trust (SLV). During the previous week, the Silver Trust’s price decreased by 5.3%. Other Silver investments such as Silver Wheaton (SLW) also fell by 6.3%. During last week, Silver Wheaton’s 2014 guidance update and quarterly earnings report were released and may have also affected the direction of its stock. Looking forward, the upcoming developments in the U.S economy, and the direction of the U.S dollar could be among the factors affecting the silver market. Let’s examine these issues.

The FOMC tapers QE3 again

The Chair of the FOMC Janet Yellen decided to taper again the Federal Reserve’s asset purchase program by $10 billion to $55 billion a month. The FOMC tapered QE3 for the third time. Following each of these decisions, the price of silver had a negative reaction and tumbled down the next day.

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