Base Metals Prices "Will Remain Stagnant"

Gold and silver prices are continuing their steady march upward, but one Indiana metals expert is predicting base metals prices will remain stagnant until the global economy rights itself.

Jerome Bunde, a stockbroker with Pennaluna and Co. in Wallace, reports that silver prices have crested from $11.53 per ounce on Jan. 2 of this year to March 6’s price of $13.35. Gold, too, has climbed steadily from a per-ounce price of $874 Jan. 2 to $941.20 March 6.

“The good thing about it is the silver prices are on an upswing and it’s very likely it will move higher as long as the global financial crisis is not solved,” said Bunde.

Both precious and base metals prices have experienced day-to-day fluctuations, which Bunde attributes to volatility in the marketplace.

“But the trend is up,” according to Bunde.

Over the course of the last month, silver reached its high point Feb. 21 at $14.41 per ounce. From Feb. 6 to March 6, the average price of silver was $13.42. During the same period, gold crested at $993.20 Feb. 20, according to Bunde.

“We’ve edged up some on both of them,” Bunde said.

The Silver upswing is a positive sign for U.S. Silver as the company — owner of the Silver Valley’s Galena Mine — targets bolstering its treasury and rehabilitating the Galena shaft, according to Thomas Parker, U.S. Silver president, CEO and company director.

“Obviously the higher the [silver] selling price, we can increase our revenue,” Parker said. “If silver prices can stay at this area or higher, it allows us to rebuild our treasury.”

If silver prices continue to rise, Parker added, the company intends to resume its rehabilitation of the Galena shaft.

The bottom line, he said, is that higher precious metals prices “give everybody a stronger feeling for the future.”

Bunde attributes the precious metals price increases to fear and anxiety about the long-term value of the U.S. dollar.

“Until we get out financial house in order, the dollar won’t do much,” according to Bunde. “People are still wanting hard assets. They’ve been reluctant to invest in the stock market outside of precious metals.”

The prices of base metals — lead, zinc and copper — have not experienced the same upswing as precious metals, Bunde said, a fact that has particularly impacted the Lucky Friday Mine.

U.S. Silver also dabbles in the base metals business, producing by-product lead and copper, according to Parker.

Since March and April of last year, when base metals prices soared to all-time highs, the value of lead, zinc and copper has dipped. Copper reached its apex last year at $4 per pound, with lead going for $1.75 and zinc worth $1.65. Now, Bunde said, base metals prices have retreated: zinc is valued at 54 cents per pound, copper is selling for $1.65 and lead prices have dipped to 53 cents as of March 6.

The ebb and flow of copper prices is of particular relevance to the Galena Mine, Bunde said.

Parker said that base metals prices as they stand right now are not contributing significantly to U.S. Silver’s financial outlook.

“That has hurt the mining industry to a certain extent,” Bunde said of base metals prices. “But we still have a pretty good silver price.”

Source: Shoshone News Press, Indiana, USA