Silver prices are moving moderately higher on Wednesday in somewhat quiet trade. The overall geopolitical landscape continues to influence gold and silver, and will likely remain the center of attention for investors for the foreseeable future. Silver is somewhat torn, however, between signs of economic weakness coming out of China and its status as a flight to safety instrument. This could possibly explain why gold seems to clearly be the stronger of the two metals currently.
The Group of Seven nations is due to release a statement today in which it will reiterate its position on the Russian occupation in Ukraine. The clock is ticking on the situation, and it is likely that without a Russian withdrawal very soon, the G7 will begin to impose economic sanctions on Russia in order to try and turn up the pressure. Crimea has scheduled a secession vote for this Sunday, and world markets will likely be paying close attention.
The potential for further weakness in China has been talked about a great deal recently as well, and one can see these concerns in the price of copper which has dropped dramatically in recent weeks. Copper prices have fallen from over $3.20 to under $2.95 in just a few days. Many consider copper to be a barometer of overall economic activity, and if this is the case, it is certainly sounding some alarm bells currently. This could potentially hold silver prices back, as silver is more affected by such issues due to its industrial use than gold.
Silver prices have been trending lower since a recent failed attempt to break out above $22 per ounce. The metal has worked its way back down nearly to the recent upside breakout level of $20.50. This could potentially present a good buying opportunity as markets have a tendency to break out, and then re-test the breakout level before moving on. Whether or not this proves to be the case with silver remains to be seen. Silver could fall back below this level as well, and trade in the previous range of $19 to $20.50 for some time. It does, however, seem unlikely that silver would fall too far given the current geopolitical tensions.
So far stocks have held up well, while oil and commodities have been getting hit. Silver investors will also likely watch equities closely in the near term for signs of weakness. Should stocks begin to falter, silver could potentially benefit on investors reallocating funds. In addition, further weakness in crude oil may work against silver and will likely be monitored.