Silver and SLV Could Come Further Down

Shares Silver Trust (SLV) resumed its downward trend last week as the silver ETF lost 1.7% of its value. This week’s non-farm payroll report and ECB rate decision could play a role in the direction of SLV in particular and the silver market in general.

The weakness of silver didn’t have just a negative impact on SLV but also on other silver stocks such as Silver Wheaton (SLW) and Pan American Silver (PAAS). In the past month, the price of silver fell by 10%, while Silver Wheaton and Pan American Silver tumbled down by 18% and 19%, respectively.

Despite the sharp fall in silver, its volatility didn’t pick up by much in the past month. During September (up to date) the standard deviation of silver is around 1.03% (for daily percent changes). The lowest this year was back in August. Nonetheless, compared to previous months the volatility is relatively low.

If the volatility remains low, this may suggest lower daily shifts in the price of silver in the near term.

U.S economy and SLV

On Friday, the U.S Bureau of Labor Statistics will publish the non-farm payroll report for September. In the last report, only 142,000 jobs were added in August – well below market expectations. The table below presents the shifts in the price of silver, USD/Yen, ADP estimates, change from estimate, and rise in number of jobs during 2013-2014.

For the rest of the report you can see it at Seeking Alpha

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