Silver, Silver Miners Post Gains on Optimism about Europe

Silver rose more than 2 percent Monday after investors gained confidence that Europe leaders would be able to handle a Greek default without letting the rest of the continent or its struggling banks suffer.

The prospect that Europe may finally get organized enough to put a fence around Greece's sovereign debt crisis lifted hopes that business on both sides of the Atlantic may be able to avoid a double-dip recession, or perhaps even grow.

Half of silver's demand depends on industrial customers so any change in the outlook for business activity affects its price.

Europe will come up with something, Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, told Bloomberg. I don't think we're going into a recession. Now is the time to be bullish, not the time to panic. The lows for the year are in.

Silver was up 2.6 percent in electronic trading to $30.76. Silver for immediate delivery rose to $30.78.

Silver mining companies also posted gains Monday. Shares of Coeur d'Alene Mines Corp. jumped 3.9 percent, Hecla Mining Co. rose 3.7 percent, Endeavour Silver Corp. added 3 percent and Pan American Silver Corp. increased 2.7 percent.

The heightened optimism lifted exchange-traded funds backed by silver. Market Vectors ETF Trust was up 1.7 percent and Global X Silver Miners rose 1.9 percent.