silverinvestingnews.com / By Melissa Pistilli / Friday December 21, 2012, 4:15am PST
The feeling of Christmas may be in the air, as the classic holiday jingle goes, but silver bells are definitely not ringing this holiday season. The spot price of silver started off the week on a downward slide that by Thursday had led it to its lowest level in four months. That was the result of the white metal playing up to its precious metal side, tracking gold and ignoring the industrially positive third-quarter US GDP (up 3.1 percent on an annualized basis); it followed its yellow cousin’s lead in a sharp sell-off Thursday morning, touching a low of $29.51 an ounce to close near the psychological level of $30 an ounce, down nearly nearly 4 percent on the day.
Several factors caused these events, market analysts have noted, including the ongoing US fiscal debate, the Fed’s talk of exiting quantitative easing, China’s moves to curb inflation and news of increased silver production out of Peru. Volcan Compania Minera (OTC Pink:VCANF), one of Peru’s major silver producers and the world’s second-largest producer of the precious metal, expects its production to rise 40 percent in 2013 to 30 million ounces. The forecast is based on an aggressive expansion plan that includes bringing three major projects online next year and investing as much as $740 million through 2016.