Early on Wednesday session, we noted that the correlation between silver and silver miners has broken down for the moment. Generally, the two move in tandem, as might be expected. However, even at the worst levels of the day following the FOMC policy announcement, silver miners continued to trade in the green.
Before the FOMC announcement, spot silver was down $0.38 at $30.50 per troy ounce.
Pan American Silver Corp (PAAS) is up $0.11 at $18.58.
Silver Wheaton Corp (SLW) is up $0.25 at $28.71.
Coeur d"Alene Mines (CDE) is up $0.25 at $21.20.
Silvercorp Metals Inc (SVM) is up $0.08 at $6.40.
It certainly was interesting to see silver prices rebound from sharp early losses to end the day essentially unchanged. This is not to say that a marvelous new market indicator has been discovered, but every once in a while, a market disconnect suggest a head fake. Unfortunately, there is no way to know if the next disconnect will mean a fall for the miners rather than silver.
Silver and silver miners have begun the second quarter in ugly fashion, with both posting losses following a strong first quarter. Perhaps today's disconnect suggests a turning of the tide. Only time will tell.
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