Silver prices are holding steady this morning as stocks and the dollar index move slightly lower while crude oil trades slightly higher.
Both silver and gold have been under some bearish pressure in recent days. The precious metals complex once again appears to be simply lacking any significant bullish inputs to drive prices on a sustainable trajectory higher.
Of course, markets are continuing to pay close attention to any ongoing developments coming out of Greece. Leaders are working feverishly in an attempt to strike a last minute deal that will allow the country to access additional bailout funds. Being the 24th of June already, however, time is running short. Even if a deal were reached today it may be difficult or even impossible to jump through all the necessary hoops in time before the current funding runs out at the end of the month. Nevertheless, markets may not panic if they see that a deal is likely, even if such a deal is not reached in time.
On the other hand, however, if a deal does not appear to be close, markets may begin to panic and a wave of risk aversion could potentially set in. This risk aversion could possibly drive stocks and risk assets lower while potentially boosting perceived safe-haven assets silver and gold.
The next few days going into the weekend could prove to be very interesting if a deal does not seem imminent. Markets have thus far been able to seemingly sweep this issue under the rug, but the current state of denial may not last long if no deal is forthcoming and a run on Greek banks is seen over the coming days.
Silver continues to appear quite comfortable in its current trading range. The market has gone essentially sideways for some time now, and without any significant bullish catalyst, it may continue to do so for the foreseeable future.
While silver could possibly see significant upside from current levels, we feel that the potential downside from current levels is considerably more limited. While a run down to the $12 or even $10 per ounce level remains a possibility, we feel this is unlikely. Silver, like gold, has been bought on the dips in recent months. It would seem there is enough buying interest in silver around the $15.50-$16 per ounce level to keep the market at or above current prices. Of course, this can change quickly but we do believe that silver could present a potentially excellent long-term buying opportunity around current levels.