High Oil Hurts Silver

As oil continues to trade around $100.00 per barrel, silver has started to fade. The iShares Silver Trust (NYSE:SLV) is trading $32.26, -0.45 (-1.38%). The key with silver is that it is not just a safety net for inflation fears and global instability, it is a production metal. Being a production metal, silver moves sharply higher when the global economy is strong. That is a major reason why silver has been charging higher of late. The higher oil goes, the more pressure it puts on the economies of the world. It is said that for every $10 move higher in oil, GDP will suffer half a percent. Therefore, it makes sense that silver should sell off and is selling off with oil spiking higher.

Silver should continue to trade lower in the coming days, especially if oil remains around $100 per barrel. It is important to remember that gold is more of a pure inflation, safety play. Please note that gold is higher today while silver is lower. The SPDR Gold Trust (NYSE:GLD) is trading at $137.75, +0.24 (+0.17%). With silver down, it clearly shows that silver is influenced by growth while gold is all about inflation and a safety.

About Gareth Soloway 168 Articles

Affiliation: InTheMoneyStocks.com

Gareth Soloway has been an avid swing and day trader since his days at Binghamton University where he studied Economics. After college, Gareth quickly excelled as a financial advisor, helping clients get their financial houses in order. While helping others gain financial independence, he continued to study the day trading and swing trading world, developing a unique market philosophy and proprietary methods. Following his work in the financial sector, Gareth went on to trade alongside professional traders. Unable to tolerate the hype of Wall Street any longer and having an amazing ability to profit using his developed techniques, Gareth Soloway decided to partner with his friend and colleague, Nicholas Santiago to form InTheMoneyStocks.com. Chief Market Strategist Gareth Soloway serves as the president and CFO of InTheMoneyStocks.Com.

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3 Comments on High Oil Hurts Silver

  1. No, silver is jumping because JP Morgan has been shorting it and the people are now buying it and demanding delivery. Crash JP Morgan, buy silver!

  2. Not this time. People are tired of getting burned. I love that consolidation is being viewed as a weakness. Silver can’t trade up a dollar everyday and have healthy growth. Watch dip buyers strike back with a vengeance!

  3. Are YOU serious?? LOL
    Silver is up another 4%+ today! You have no idea what you are writing about do you? Silver is the unstoppable force of this decade. I just dare you to quickly find a 100 oz bar of it anywhere! Seriously, try : )

    You crack me up!

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