In Asian and European trading on Monday, Comex silver futures continued the frenzy of trading driven by US "retail investors" last week, rising more than 10 per cent at one point and breaking the $30 round mark for the first time since February 2013. However, the silver market size, institutional position and other factors may become the biggest resistance to the silver price to continue to "hot speculation".
As of press time, silver futures still rose 10.02% to 29.68 US dollars per ounce.
JOE PERRY, an analyst at Jiasheng Group, wrote that spot silver is building a flag on the weekly chart. Silver rose and broke the trend line at the top of the flag (around $27.65), followed by a move towards the flag target around $33.25. Whether this is forced out of the air or stemmed from inflation hedging, a rise is a rise.
It is worth mentioning that iShares Silver Trust, owned by ETF, BlackRock, the world's largest silver tracker, recorded a record one-day net inflow of $944 million on Friday; this past weekend, there has been a boom in the sale of silver coins and related products on internet platforms, from the US to Australia in the Asia-Pacific region. The APMEX market, known as the "North American Precious Metals Trading Wal-Mart", even announced that the platform had to suspend silver trading until the Asian market opened on Monday because of huge demand, so that the platform could find silver in the market.
Similar to the recently hyped targets such as game stations, the rise in silver prices can also be traced back to the WSB forum on Reddit. Last week, a post called silver "the world's largest short mark" and encouraged retail investors to buy iShare Silver ETF to fight the world's largest bank.
However, from various angles, there is a very obvious difference between the silver market and the small tickets with a market capitalization of only $1 billion at the beginning of the year, such as the game post station, which is also the main reason why the market is not optimistic about silver continuing to "soar".
First, the basis of short selling is not significant. According to CFTC futures and options data, silver has been in a net long position since mid-2019. And more importantly, the value of silver in London vaults alone is as high as $48 billion, which is unlikely to be the target for "retail" forces to double.
In addition, there is also a problem of "values" in being long silver. An important emotional sustenance of the stock bar bro on WSB is to punish Wall Street's greedy institutions. However, the Citadel fund, which is seen as an important target by the forum, is itself one of the largest bulls in iShare Silver ETF.
However, where is the high point of the silver market this round? I am afraid we still need to wait for the market game. Howie Lee, an economist at OCBC Bank, said in an interview that last week's events showed that it was unwise to underestimate the purchasing power of retail investors, and the silver market proved it again today. Aggressive bulls may find that the size and liquidity of the silver market make shorting more difficult than game stops, but the momentum is still on their side.
Volatility in silver prices also transmitted to the stock market, with Hong Kong shares China Silver Group (0815) closing up 62.65 per cent on Monday and Australian Silver Mines up 49 per cent.
As of press time, US stocks rose 22.88 per cent in pre-market Fortuna Sliver Mines, 34.11 per cent in First Majestic Sliver, 17.38 per cent in Pan American Silver and 26.26 per cent in Endeavour Sliver.
