Silver gains 20% in January 2012; is it a beginning?

By Debbie Carlson
Commodities put in a strong January performance, but few markets earned as much as silver did in the first month of 2012, gaining 20% during the period. That put silver in second place for the strongest commodity futures markets, beaten only by orange juice.

As February dawns, Silver continues to build on its gains, but it is hitting some resistance as it targets the $34 an ounce level. On Wednesday, March silver futures on the Comex division of the New York Mercantile Exchange settled at $33.837 an ounce.

Silver has been on a solid uptrend since hitting a low of Dec. 29 of $26.1450 for the March contract.

Adrian Day, president, Adrian Day Asset Management, said much of the reason why silver rallied so much in January was because it had fallen so much during December. On Nov. 30 March silver settled at $32.804 and on Dec. 30 it closed at $27.915, a 15% swoon in one month alone. Silver wasn’t alone in its December descent, many other markets including Gold and other commodities tanked in December. Likewise, many commodities rose last month.

Day said silver’s trip under $30 may have enticed bargain hunters who were able to pick up the metal at prices not seen since late September.