The silver price has remained subdued this year, falling just less than 5% year-to-date, and is now near a 14 month low. Naturally, investor psychology has been affected by the price weakness.
Quoted today in Bloomberg News, Mark O’Byrne, director of GoldCore said that “sentiment remains quite bad in the silver market.”
Its well accepted that investors in the financial markets are known to experience cycles of emotion, from excitement and euphoria, through to fear and panic, before the cycle turns again after despondency and goes back to hope and optimism.
Although the silver price weakness has damaged psychology, some interesting trends have emerged which appear to be signalling that the core silver retail and indeed institutional investor remains resilient and is even using the current price weakness as a further buying opportunity.
The overall trend in the silver market currently appears to be, when prices weaken, investors continue to hold and in some cases buy more. While the price has fallen, overall holdings of the silver ETFs still remain near an all-time high. This would suggest that silver investors are now expecting higher prices again due to continued industrial and investment silver demand.