Despite the recent fall in the price of silver during last week, silver is still up in January. Will silver resume its upward trend in the coming weeks? Let’s analyze the recent developments that may affect silver (SLV).
The rally in silver price has also reflected in the rise in demand for leading precious metals’ ETFs including iShares Silver Trust. During January, Silver Trust’s price rose by 2.5%. The upcoming FOMC meeting may affect the direction of silver price. Let’s take a closer look at this issue.
FOMC’s monetary policy
The upcoming FOMC meeting will be Bernanke’s last meeting as Chairman of the Federal Reserve. The current expectations are that the FOMC will announce another tapering of $10 billion. Thus, the long-term asset purchase program will decline to $65 billion a month. In the previous meeting, the decision of the FOMC to taper QE3 has resulted in a sharp drop in the price of silver the following day.
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