The price of silver rallied for two consecutive weeks. Despite this recent recovery, silver is still around $19. This week, the FOMC meeting could stir up the bullion market and perhaps even curb down the recent recovery of silver.
The price of silver rose by 3.5% during last week. Further, several silver related investments also increased last week: iShares Silver Trust (SLV) and Silver Wheaton (SLW) fell by 3.5% and 7.8%, respectively.
Despite the recent sharp rise in the price of silver the standard deviation of silver prices has diminished in the past several months, as indicated in the chart below.
But the FOMC’s upcoming policy meeting, which will be held on June 17-18, and the press conference to follow could have a short term effect on the price of silver. Let’s see why.
Currently, the markets expect the FOMC to taper again its asset purchase program for the fifth time by another $10 billion to a purchase rate of $35 billion a month. This expected decision could have a modest negative impact on silver.
The table below shows the FOMC’s past decisions and the impact they had on the price of silver the day of these decisions were released and the following day.
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