Silver Futures Record Longest Rally Since August 2013

After a fairly uneventful January, silver is capping off the first week of February with some good news: silver futures have recorded their longest rally since August 2013. 

The week, however, did not start off quite so promisingly. On Monday, the white metal reached a high of just $19.46 per ounce; Money Morning’s Tara Clarke commented at the time that it was “still discounted due to last week’s drop.” Tuesday was much the same, with silver trading in a fairly tight range of $19.32 to $19.61.

But on Wednesday, the story began to change a little. Silver jumped up to $20.02 during morning trading, though it ended the day about 15 cents lower. Explaining the increase, Bloomberg quotes Verdmont Capital’s Scott Gardner as saying, “[p]recious metals are bouncing as the equity markets take a hit, and there is turmoil in emerging markets. Gold and silver are attracting safe-haven buying.”

Today, silver improved upon its Wednesday high, rising to $20.16 early this morning. While the white metal was unable to keep its head above $20, it closed the day not far off from that price, at $19.95. And, as mentioned, silver futures, which settled slightly lower, at $19.928 on the COMEX in New York, “posted the longest rally since August,” as per another Bloomberg article.

Echoing Gardner’s statement, Phil Streible, a senior commodities broker at RJ O’Brien & Associates, told Bloomberg, “[p]eople are still looking for safe-haven assets. Traders are starting to reposition, based on concerns over emerging-market growth.”

Company news

Making a splash on Monday was Silver Standard Resources (TSX:SSO,NASDAQ:SSRI), which announced plans to purchase the Nevada-based Marigold gold mine from subsidiaries of Goldcorp (TSX:G,NYSE:GG) and Barrick Gold (TSX:ABX,NYSE:ABX) for $275 million.

Among the benefits the company will reap are “immediate positive cash flow from a mine in a prolific gold-silver region” and an improved “operating and political risk profile.” The sale is in line with Goldcorp’s “ongoing strategy of disciplined portfolio management,” the Financial Post quotes CEO Chuck Jeannes as saying, while Barrick commented similarly.

Later in the week, on Thursday, Aurcana (TSXV:AUN,OTCQX:AUNFF) reported its production results for the fourth quarter of 2013, commenting that its La Negra mine put out a total of 727,842 silver equivalent ounces. That’s a 16-percent increase over the year-ago quarter. For the whole of 2013, the mine produced 2,893,235 silver equivalent ounces, up 14 percent from 2012.

Junior company news

On Tuesday, Trevali Mining (TSX:TV,OTCQX:TREVF) released an update on commissioning at its Santander zinc-lead-silver mine, located in Peru. Ongoing mineral processing plant operations, as well as zinc and lead-silver concentrate production, are progressing well, the company said.

Specifically, last month throughput continued at 2,000 tonnes per day, the full nameplate capacity, while recoveries came in at 84.9 percent for zinc, 84.8 percent for lead and 70.7 percent for silver. Trevali expects “both recoveries and concentrate production” to improve as further mill optimization occurs and as the transition is made “to full mill feed from underground production.”

The next day, Kootenay Silver (TSXV:KTN) announced the completion of mapping, core logging and the compilation of results from the 5,500-meter phase of the 2013 drill and resource expansion program at its Mexico-based Promontorio silver project, commenting that the 2013 drill season is now over.

President and CEO James McDonald said that three major trends have emerged where “the size of alteration and tenure of surface sampling” point to “excellent potential” for new gold and silver discoveries.

The same day, Monarques Resources (TSXV:MQR) reported the most recent drill results from the Quebec-based Simkar property, in which it holds a 50-percent interest. Jean-Mark Lacoste, the company’s president and CEO, said the results “confirm that there is an as-yet unassessed silver potential.”

 

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

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