Silver price remains below 20

The price of silver has once again failed to breakthrough the $20 (£12) mark settling at $19.50 today (August 26th).

Figures from the New York Mercantile Exchange (NYMEX) showed silver futures for September increasing by 14 cents but not going over the $20 mark. It represented the tenth consecutive session for which it had remained below $20 benchmark and despite being boosted after three days of losses it remains close to a ten-week low.

The NYMEX highlighted today's figure to be the lowest close June 11th. Investors were trading at a one per cent premium to the front-month silver futures contract on the Shanghai Futures Exchange. Comex silver also reached a low of $19.28 on August 21st and remained flat throughout August 22nd.

Speaking in an interview with Bloomberg, Bart Melek, the head of commodity strategy at TD Securities in Toronto, said: “The interest in silver is clearly on the short side …People expect silver to trade weak going forward, as the fundamentals are very weak.” Money manager shorts in silver climbed 32 per cent last week to 18,048 contracts, following an 86 per cent increase the week before."

Bloomberg stated that the data indicates an increase in demand for durable goods in the US and this sector grew at its fastest pace since March 2011. The performance of silver was very similar to that of gold which also recorded a drop of 0.3 per cent on Monday (August 25th) to $1,277.19.

Analysts believe that one of the driving forces behind gold's poor performance is the recovery of the US economy. The nation's benchmark Standard and Poor's (S&P) has been improving of late and passed the 2,000 mark for the first time prompting optimism for the European Central Bank to boost economic growth, having a positive effect on the global financial markets.

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