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Silver Wheaton Takes A Dive On Hawkish FOMC Meeting Minutes

Date: Thursday, August 18, 2016 3:40 AM EDT
  • Silver – Silver Wheaton, as its name would suggest, is a company that is largely focused on silver. As a result, the company experiences heavy exposure to spot-market prices. If the Federal Reserve does make the decision to increase its interest rate, the value of the USD will rise, putting pressure on silver. As a result, we’ll likely see declines in the commodity. Because this is the commodity that Silver Wheaton makes its money from, this will likely lead to declines in the value of the stock.

  • Market Side Effects – At the end of the day, increased rates aren’t a good thing for the market. With increased interest rates comes less lending and more saving. Unfortunately, this leads to declines among corporations. With less money to go around, Silver Wheaton could take a big hit!

What Binary Options Traders Should Be Watching For

When trading Silver Wheaton binary options, there are two things that you’ll want to watch very closely. First and foremost, pay close attention to any developments surrounding the Federal Reserve’s interest rate. As mentioned above, changes to the rate could lead to big movement in the stock. Also, keep an eye on global economic conditions. While the Fed’s plans to increase rates threatens silver and Silver Wheaton, economic conditions elsewhere could continue to lead to global increases in safe haven demand, helping the value of the stock to climb anyway.

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