Silver in real funk, classic unwinding on the cards

WASHINGTON (Scrap Monster) : The apparently strong US dollar and the wary investor approach battered silver prices Monday, witnessing heavy investor selling. Falling by more than 4% to $21.30 per troy ounce, it now stands near to the all important psychological support levels of $20.

The Silver prices which had been in uptrend for continuous 10 years, has witnessed a slump of nearly 14% during the month of April alone and 30% during the year 2013 till date. The use of Silver in industrial applications has diminished. The oversupply concerns have further bogged down the prospects of the white metal.

According to estimates, the global silver market is said to be in 4,000 tonnes excess. Growth in mine supply and weakness in demand has contributed considerably to the drop in Silver prices and is forecast to keep the prices under pressure in the near term. Mine supplies recorded a huge growth by adding 30,000 ounces last year. On the other hand, the industrial demand for the metal has disappeared hugely.

So, where’s the floor? The industry experts are said to be watching out the crucial $20 levels, a fall below which can drag the Silver prices to much lower levels.