SLV reaching a new low

The recent decision of the FOMC to end QE3 didn’t come as a surprise. The hawkish tone in the statement provided the ammunition to shoot down Shares Silver Trust (SLV) — its price fell by 6.1% during last week.  This news along with Bank of Japan’s plan to accelerate its asset purchase program strengthened the U.S. dollar and contributed to the downfall of SLV. Let’s review these news items and see what is up ahead for SLV.

When doves cry

The FOMC ended, as expected, its asset purchase program. But this wasn’t the only issue that came up from the statement. The tone was more hawkish with one dissenter, who is considered a dove. The statement was very positive mainly with respect to the progress in the labor market, as I pointed out in a recent post. This statement raised the odds of the FOMC announcing a rate hike in the very near term.

The minutes of the FOMC meeting will be released on November 19th. The minutes could provide additional insight behind the recent decision. The market’s reaction to the minutes tends to vary from the reaction to the statement. We could see a more dovish tone in the minutes, which may pull back up SLV. This was the case, at least, in the previous release of the minutes, when SLV pulled up by 1.2%.

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

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