November: The Month in Silver

Greek parliament during confidence vote.

The month of November opened on a down note for gold, silver, and stocks, as renewed fears from Europe sent commodities and paper securities crashing, while the dollar firmed against the euro. Gold closed a dollar under $1700 on Tuesday, November 1, down 1.3% from its Halloween day close. Silver suffered more severely, closing at $32.97, down 3.7%. Stocks were down across the board, with the Nasdaq experiencing the biggest loss at -2.9% for the day. The euro lost 1.2% against the dollar, as money fled all other asset classes and jumped into greenbacks.

Wednesday November 2 saw precious metals, stocks, and the euro bounce back, though, and in a big way. Gold and silver were up 2.6% apiece, closing at $1,743 and $33.83, respectively. Stocks were up across the board, with the Nasdaq trailing this time at +1.3%. The euro, meanwhile, gained 0.5% against the dollar. Oil was up, too, and banking stocks led a broad-based stock-market rally, that was admittedly light on volume. Analysts called this a “soft rally,” but it got a little harder on November 3, when stocks continued to soar in bigger volume, with the Nasdaq leading at +2.2%. Silver outperformed even the tech-heavy Nas, though, gaining 2.6% to close at $34.72 per ounce. Gold finished at $1,758, up 0.9%.

Greek parliament during confidence vote.

The first week of November ended with metals, stocks, and the euro down again, as the dollar once again showed strength. Silver was the most volatile asset once again, this time falling 2.2% to $33.95. Gold closed at $1,749, down 0.5%. Uncertainty loomed as traders awaited a confidence vote out of Greece. For the week, gold was up 0.4%, while silver was down 4.2%. The S&P 500 fell 2.5%, the Dow was down 2%, and the Nasdaq lost 1.9%. The euro lost 2.8% against the dollar.

Week Two

Tea Party activists on the left; Occupy Wall Street on the right. (Reverse of their positions on the political spectrum).

Gold surged to open the first full week of November, gaining 1.9% to close at $1,782. Silver also performed well, gaining 1.6% to close at $34.48 per ounce. Stocks were up across the board, with the S&P, Dow, and Nasdaq gaining 0.6%, 0.7%, and 0.3%, respectively. The dollar was down. Tension mounted in Greece and Italy, as the birthplaces of Western civilization seemed poised to erupt in violence and unrest over fiscal austerity proposals. Meanwhile, in the U.S., it was reported that popular support for the Tea Party and Occupy Wall Street protest movements was declining.

Precious metals and stocks were up again on Tuesday, along with the euro, but things reversed on Wednesday, November 9. On that day, stocks were absolutely hammered, with the S&P 500 losing 3.7%, the Dow 3.2%, and the Nasdaq 3.9%. The dollar showed incredible strength, with the euro losing 2.1% against it. Gold and silver were both down, too, but they held up better than paper investments: gold lost 0.6% to close at $1,784, and silver performed best of all (next to cash), losing just 0.2% to close at $34.58. What caused this? More fears out of Italy.

All told, gold and silver were looking pretty good for the month at this point. But then on Thursday, November 10, they were hit hard, while stocks were up. The dollar was roughly even. Silver was hit hardest, with a 2.5% loss. This was a bad day for precious-metals traders, as gold fell 1.6%, while stocks were up across the board, and the dollar was down against the euro. This showed a move out of safety and into more speculative investments, and it was a bad signal for conservative investors.

Friday was 11-11-11; Veteran’s Day in the U.S. Gold bounced back to the tune of 1%, ending the week at $1,773. Silver was up, too, but not by nearly as much, gaining only 0.2% to close the week at $33.77. For the week, gold was up 1.3%, but silver was down again, this time by 0.5%. This was the second straight week that saw gold gain while silver fell. Meanwhile, stocks were mixed, with the S&P 500 and Dow Jones Industrial Average posting gains of 0.8% and 1.4%, respectively, while the Nasdaq fell by 0.3%. This type of action would normally be bullish for precious metals, as the Dow’s outperformance of the Nasdaq – especially in light of the Dow’s gains versus the Nasdaq’s losses – would seem to indicate a flight from risk, which is usually good for gold and silver. However, this turned out to not be the case.

Week Three

Italians protest their nation's debt crisis.

Week Three started off good for precious metals, especially silver. Silver gained 1.8% to close at $34.38, while gold was up 0.2% to a patriotic $1,776. Stocks were down across the board, and the dollar was up against the euro. This as the European debt crisis spread from Italy to Spain. This should have been bullish for both the dollar and precious metals, but silver and gold would have a rough time of it for the rest of the week. On Tuesday, gold was up 0.5% while silver fell by 1%. Then on Thursday, gold fell 1.6% while silver was up by 1.3%. On Friday, the two precious metals finally agreed, but it was to the downside, with gold falling 0.8%, while silver had deadly losses of 3.3%!

For the week, gold fell by 3%, while silver had losses of 4.5%. Gold still outperformed the S&P 500 and the Nasdaq, which lost 3.8% and 4%, respectively, but not the Dow, which was down 2.9%. The dollar, meanwhile, proved to be the best short-term investment, as it gained more than 1% against the euro. Oil also fell below $100, indicating fear of economic stagnation greater than inflation.

Week Four

Cash was the best investment for most of the month.

The fourth week of November saw gold down four of five days, and silver down three of five days. Gold has successive closing prices of $1,702; $1,699; $1,681; $1,693; and $1,689; silver has successive closes of $30.90, $31.85, $31.51, $31.94, and $31.24. For the week, gold lost 1.8%, and silver lost 3.1%. The stock market was closed on Thursday, November 24, but through Wednesday, the S&P and Nasdaq each lost 4.4%, while the Dow lost 4.6%. Friday saw stocks bounce back in a big way, though, with the S&P gaining 2.9%, the Dow 2.6%, and the Nasdaq 3.5%. All three majors were still down for the week.

Meanwhile, the euro lost 2.1% of its value against the dollar, going from $1.3517 to $1.3233. The real story here is the strengthening dollar, which is sending the value of stocks and precious metals lower, at least when denominated in dollars.

Week Five

The leaders of Germany and France; Angella Merkel and Nicolas Sarkozy.

The final week of the month began with big gains for gold and silver, and even bigger gains for stocks. Gold and silver gained 1.5% and 2.4%, respectively; while the S&P, Nasdaq, and Dow gained 2.9%, 2.6%, and 3.5%, for their part. The dollar gave back some of its gains, as the euro gained 0.5% on it, as France pressed its neighbors for stronger discipline on EU budgets. Traders also liked bullish Black Friday numbers.

Gold was up on Tuesday, while silver fell a bit – neither metal moved by more than 0.2%, as gold closed at $1,717 on the PM London Fix, and silver at $31.96. Then, to finish off the month, gold gained 1.7% to $1,746, while silver fell 1.9% to $31.35. This split day capped a split month for gold and silver, as the former posted a respectable 1.4% gain, while the latter fell by a painful 8.4%. However, it’s important to note that silver was up by 12.4% last month, so it is still up for the two-month period in question. And, with this 8.4% haircut, Christmas may be the perfect time to stock up on silver stocking stuffers.