Silver Price Continues Its Ascent
The price of silver continued its eyeopening turnaround Monday, leaping another 34 cents per ounce.
Silver’s latest jump on the New York Comex market put the metal at $5.71 an ounce. The metal traded 30 percent lower - around $4.38 an ounce - as recently as March 1.
As the dollar continued to weaken on overseas currency markets, investors turned to gold and silver, analysts said. Gold prices rose $4.10 to close at $394.10.
Also, strengthening economies worldwide have begun to increase demand for industrial uses of the metal, said John Worrell, an analyst at Penaluna & Co. in Coeur d’Alene.
“The instability in the currency markets has created a lot of new opportunities in precious metals,” Worrell said. “No one seems to be selling silver short right now.”
Traders who did short the metal in hopes it would go down in value had to cover their positions Monday, a maneuver called “shortcovering.” Short-covering contributed to Monday’s rally, Worrell said.
Monday’s silver price close was near the highest levels the market reached in 1994. Any time the metal edges toward $6 an ounce, more attention becomes focused on Idaho’s Silver Valley, where unemployed miners hope closed mines will reopen.
Silver Valley Resources, a joint venture between Asarco Inc. and Coeur d’Alene Mines Corp., owns the two mines most likely to begin production if silver prices continue to improve.
The Coeur and Galena mines are on “standby” status, which means they could be restarted to produce ore within a few months. Both mines have labor contracts already in place.
But prices would need to rise well above even Monday’s close for the mines to reopen, said Tony Ebersole, director of investor relations for Coeur d’Alene Mines.
Ebersole said analysts he speaks with seem to think the silver market is ripe for a correction sometime in May.
Local stocks benefitted from the strength in gold and silver prices Monday. Coeur d’Alene Mines rose $1.63 to $20.63; Hecla Mining Co., $1.25 to $11.75; Gold Reserve Corp., 25 cents to $8.25; and Pegasus Gold Corp., 88 cents to $13.38.