Silver price falls back closer to $19 following US Fed taper news

The price of silver fell back closer to $19 an ounce this week, pushed lower in part due to the US Federal Reserve’s action to taper their bond buying program by $10 billion dollars per month, a move which supports a stronger US dollar.

Latest Silver Price

The spot price of silver closed the week at $19.33, down from the $20 mark on Monday, falling by more than four percent on Thursday and Friday.

US Fed Taper

While most analysts had expected the Fed to wait a few months into next year before announcing it would trim its monthly $85 billion of bond purchases, the fact it did so on Wednesday by $10 billion was welcomed by respondents. Also, Ben Bernanke said the purchases would likely be cut at a “measured” pace through much of 2014 if job gains continued as expected, with the program fully shuttered by late 2014.

So what does this mean for the price of silver and other commodities? Most analysts are agreed that the price of silver going forward will remain under some pressure, however 2014 could well be a positive year for the precious metal. Precious metals expert David Morgan commented “I think we’ll see $30 to $34 silver and $1700 gold by the end of 2014.”

Most analysts see silver trading between $19 and $26 or so in 2014. The majority, in fact, place the white metal at a conservative $21, as is evidenced by the following estimates:

Barclays — $19.50 per ounce
Morgan Stanley — $21.01 per ounce
UBS — $20.50 per ounce
Bank of America — $26.38 per ounce
Thomson Reuters — $20.42
Bank of Montreal — $21
Commerzbank — $21.50 per ounce

Investors in silver may also do well to keep in mind what David Morgan, publisher of The Morgan Report said in June this year “There’s only so much silver available under $20 an ounce. There’s even less available under $19 and even less available under $18. So the lower it goes, the shorter time frame it’s going to stay there. Even if people panic when it goes short term into the lower prices, the reality is that the entire silver market can’t be bought at $19.70 per ounce. There are only so many offers of physical silver at that low price, and it’s a small, small amount. Once that’s taken off the market, then it starts to pressure the market back up.”

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Silver price falls back closer to $19 following US Fed taper news