UNITED STATES October 07 2014 11:06 AM
NEW YORK (Scrap Register): Silver looking increasingly attractive at current levels, said ETF Securities.
In a sign of capitulation, the month of September marked the largest month of gold ETP outflows since December 2013. Total gold ETP holdings declined 1.4mn ounces to 54.1mn ounces.
Silver ETP investors remained stalwart though as total silver ETF holdings ended September at a record high of 645mn ounces.
However, silver futures non-commercial short interest reached a new record high, boosting futures op en interest to the highest level since February 2008.
Last week, silver declined for the 12th consecutive week, the longest period of weekly decline in the history of our database since 1968.
Silver appeared quite ripe for a short-covering rally. ETF Securities believes the current price weakness to be temporary as investor focus returns to the positive fundamentals.
Over 50% of silver demand comes from industrial applications, with China and the US accounting for over 40% of fabrication demand.
ETF Securities believes the near-term catalyst to a short-covering rally will be continued improvement in US economic data and further stimulus measures in China.