Silver Prices Tumble 10.5% in May, yet American Silver Eagle Coins Rally

U.S. silver prices fell sharply in May as investors turned toward the safety of the dollar and away from commodities and stocks. Chunks of investment money did gravitate to the American Silver Eagle as the 99.9% fine silver bullion coin logged its best monthly performance since January.

In closing out the month on Thursday, silver prices for July delivery declined 22.6 cents, or 0.8% to $27.76 an ounce on the Comex in New York. Silver prices hit an intraday low of $27.51 an ounce and touched a high of $28.19 an ounce.

For May, silver traded down $3.26, or 10.5%, to register the third straight monthly loss. Jim Wyckoff of Kitco noted the following about the white metal:

"Silver bears still have the solid overall near-term technical advantage. A three-month-old downtrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $29.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the December low of $26.50. First resistance is seen at Thursday’s high of $28.19 and then at $28.50. Next support is seen at $27.50 and then at this week’s low of $27.355. Wyckoff’s Market Rating: 3.0."

Three consecutive monthly losses have weighed on silver’s year-to-date results — despite its whopping 19.2% gain in January. While up for most of 2012, silver prices are currently off 15.8 cents or 0.6%.

In other New York precious metals futures on Thursday and for the month:

• August gold prices closed to $1,564.20 an ounce for a 6% loss in May,
• July platinum prices settled to $1,417.60 an ounce for a 9.8% monthly loss, and
• September palladium prices closed to $613.90 an ounce for a 10% loss in May

Platinum is now the sole precious metal higher in 2012, up 0.9%. Losses for the other metals this year include 0.2% for gold and 6.4% for palladium.

Also on Thursday, the London silver Fix was $28.10 an ounce for a daily fall of 42 cents, or 1.5%. For May, it came down $3.10, or 9.9%.

And in other London fixings for the day and month, gold at $1,558 an ounce declined 5.6% in May, palladium at $611 an ounce lost 10% for the month and platinum at $1,405 an ounce declined 10.5% for the month.

American Silver Eagle Coins

While unlikely to change, the United States Mint is yet to officially close out the month for its bullion American Silver Eagle. That will likely occur on Friday.

Its latest published sales, however, indicate that 2.75 million American Silver Eagle coins have sold in May. That is a 1.23 million, or 80.9%, more than April and a stark improvement over the nearly first two weeks of the month when the bullion coins were tracking at the slowest pace since February 2008.

With demand surging as silver prices fell further, the only 2012 month to perform better than May turned out to be January with its sales of 6.107 million — and that was the second best monthly total in the 26-year history of the American Silver Eagle.