HardAssetsInvestor

Written by Sumit Roy  |

May 03, 2011

Weekly Precious Metals Monitor: Silver Hits A New Record After 31 Years

Details

Gold wasn't the only outperformer last week; silver finally struck its own record, thanks to a plunging U.S. dollar.

Welcome to the weekly Precious Metals Monitor, a new feature on Hard Assets Investor, where we track the trajectory of various precious metals prices and products, and examine the critical fundamentals underlying performance.

The parabolic move in precious metals continued last week, as both gold and silver notched new record highs. For gold, this is nothing new; we've seen the yellow metal hit records week after week. But silver was another matter entirely.

After 31 years, silver prices have finally surpassed their previous record, hit in 1980 when the Hunt brothers unsuccessfully attempted to corner the market. The new high, set last Tuesday, was $49.79/oz, or slightly above 1980's $49.45 print. Meanwhile, gold got as high as $1,569/oz:

Silver Weekly Chart 1975 - present:

Gold Daily Chart 1-Year:

Over the past five sessions, gold rose by 3.69 percent, silver added 1.69 percent, platinum advanced 2.81 percent and palladium led with a 3.29 percent gain.

Currencies

Most of the move can be traced back to the weak outlook for the U.S. dollar. On Wednesday the Federal Reserve announced its latest monetary policy decision, giving no indication that it was about to reverse its dovish stance anytime soon. The Fed's accommodative stance contrasted with much more hawkish policies abroad, such as those in Europe and China, and thus appeared significantly U.S. dollar-negative. That gave precious metals traders the "all-clear" to bid prices even higher.

Indeed, last week the U.S. dollar plunged to new three-year lows. The trade-weighted U.S. Dollar Index has now fallen for nine straight sessions, briefly falling under 73—only a smidge above its 71.33, or the all-time low, set back in early 2008.

Meanwhile, both the euro and the British pound hit 17-month highs against their U.S. counterpart, while the Australian dollar and Swiss franc advanced to all-time highs. Another interesting currency mover was the Chinese yuan, which hit a 17-year high against the greenback.