How does silver arbitrage a new year's low gold and silver than fast high precious metals?

Recently, the trend of precious metals is relatively weak under the dual pressure of the epidemic and the Federal Reserve's debt reduction. Silver hit a new low this year, gold's performance was slightly stable, and the gold-silver ratio quickly rose to more than 77. Market participants said that precious metals are expected to maintain a weak trend in the near future, and shorting gold at the current time may have a better profit-loss ratio.

Wang Yanqing, a futures researcher at CITIC Construction Investment Co., Ltd., told the Financial Associated Press that the rebound in the gold-silver ratio this round shows differences in gold and silver fundamentals, and the core influencing factor is the continued rebound in the epidemic in the United States. The number of newly diagnosed COVID-19 in the United States has risen rapidly from the beginning of July, and the rising market of gold and silver ratio has started at this time. Silver is under more pressure as the epidemic will put pressure on the economy and reduce demand for commodities.

Galaxy futures researcher Wan Yijing told the Financial Union that due to the recent Fed cutback QE expectations gradually increased, the precious metals as a whole under greater pressure. However, due to the interference of the epidemic and geopolitical problems, the market risk aversion is still strong, resulting in the overall trend of gold is stronger than silver.

Gu Jiannan, a futures analyst at Haitong, told the financial news agency that the US retail sales data released last week fell somewhat, indicating that US demand peaked after the gradual withdrawal of financial subsidies. The gold-silver ratio is highly related to economic expectations, and economic expectations are weaker, which also drives the gold-silver ratio upward.

Precious metals may maintain a weak trend in the near future.

With regard to the future trend, market participants pointed out that this week, the market will focus on Federal Reserve Chairman Powell's statement on the US economy and the plan to scale back bond purchases at the annual meeting of the global central bank. Powell is expected to give more details about taper, the dollar index is expected to continue to perform strongly, and precious metals will continue to face adjustment pressure.

Wang Yanqing believes that the core of the impact on gold and silver prices is still the change in Fed policy. At present, the potential impact of the gold market on the Fed's continued release of curtailment of bond purchases in the near future has not been fully valued, but with the gradual pace of Fed taper, gold and silver may continue to operate under pressure. In addition, if the epidemic situation is controlled later, the gold-silver ratio also has a large downward space.

From the analysis of gold and silver ETF position data, the market is not optimistic about the future trend of precious metals. As of Aug. 20, SPDR gold ETF holdings were down 10.18 tons from last week, and SLV silver ETF holdings were down 170.02 tons from last week. As of Aug. 17, the net non-commercial long position in COMEX gold increased by 23136 positions compared with the previous week, while the net non-commercial long position in COMEX silver decreased by 3254 positions compared with the previous week.

Wan Yijing also pointed out that if the epidemic can continue to be effectively controlled in the future, the expectation that the Fed will gradually begin to reduce QE will not change. However, the expected strength will affect the short-term price fluctuations, and the medium-and long-term shock downside expectations are still strong.