Mystery Hit and Run Asian Gold Seller Strikes Again, Large Speculative Positions in Silver Rise, Morgan Stanley Names Gold and Silver As Top 2013 Commodities Picks, Safe Haven Buying in Silver Re-Emerges.

Silver suffered another setback the week that ended Friday, December 7th. The good news for silver investors is that in this second consecutive weekly drop, it only declined about one percent over the previous week’s final price to close last Friday at $33.09.

Silver once again became a hostage to gold this week as the mystery seller from the prior week returned with a vengeance. Besides this hit and run incident that seriously impacted the white metal, silver saw bullish fundamental factors help it to recover by the end of the week. Large speculative positions in silver rose, Morgan Stanley came out with a bullish prognosis for silver, and safe haven buying in silver re-emerged by the end of the week.

Mystery Hit and Run Asian Gold Seller Strikes Again

Spot market silver started the week at $33.74, up about a percent over Friday, November 30th’s close. In Tuesday in the early morning Asian trade session, another sinister hit and run spot metal selling incident occurred in gold markets, as had in the week prior.

While there was very little liquidity and volume in the time when both London and New York spot markets were closed, an Asian seller suddenly appeared and executed heavy sell orders in the yellow metal.

Gold plunged below $1,700 an ounce on the drive by shooting, and silver followed suit as it dropped like a rock below $33 per ounce. The white metal then spent the rest of the week reacting to more positive, bullish sentiment while it gradually worked its way back up to a respectable level by Friday.

Large Speculative Positions in Silver Rise

The latest Commodities and Futures Trading Commission report that came out Friday, November 30th demonstrated that the large speculators had been busy increasing their long positions in not only silver, but also in all of the precious metals complex.

This rise in silver positioning had been demonstrated when silver had jumped to $34.07 as of November 27th. Needless to say, the increased confidence in silver bolstered prices and helped to cushion the blow of the drive by shooting selling in gold early in the week.

Morgan Stanley Names Gold and Silver As Top 2013 Commodities Picks

Silver also received another strong vote of confidence from one of the biggest names in the investment banking business this past week. Morgan Stanley ranked gold and silver as their preferred commodity investments for the coming new year. They anticipate that silver prices will rise dramatically enough to average $35 per ounce for 2013.

As a further compliment to the white metal, Morgan Stanley declared that silver remains a cheap substitute for gold. They expect silver will outperform its big bother gold in the year 2013. This is not only bullish news for silver now, but also on a going forward basis, as the white metal continues to collect impressive endorsements about its price direction and action next year.

Safe Haven Buying in Silver Re-Emerges

What week would be complete without some seesaw rhetoric out of Washington D.C. about the looming fiscal cliff along with discussions about the still ongoing sovereign debt crisis out of Europe? The European Central Bank slashed their forecast for economic growth in the EU from stagnant to a slight decline at their monthly meeting this past week.

This provided new safe haven demand in both gold and silver as the Euro tanked, and it also helped to flush out some of the short sellers in silver too. Announcements that still no progress has been reached in the fiscal cliff saga in Washington also helped bolster silver prices to end the week back over $33 per ounce.

Take Away On Silver Market Prices

While silver has led gold in advances much of the year, the white metal can still be taken hostage by severe gold price drops. This is exactly what happened for the week that ended December 7th. Most of the fundamental news for silver proved bullish this week, but the drive by shooting sell-off in gold early Tuesday morning simply did too much damage for silver to recover to its previous highs of the week.

The good news for those who are long silver is that the precious metal held its $32.50 major support line that it needs to stay above in order to continue its recent bullish recovery. Major resistance currently lies lurking at $34.49. Silver will have to smash through this convincingly to break out of its recent $32.50 to $34.50 range.