[SMM brief Review] Vaccine Research and Development is bearish Silver ETF position brushes a new low for 2 weeks

SMM11 March 18: although the global epidemic continues to ferment recently, but the vaccine news comes out frequently. New progress has been made in the Pfizer vaccine, and recently MODERNA reported that its novel coronavirus vaccine can remain stable for 30 days at refrigerator temperature and does not require on-site dilution, and the effectiveness of the phase III trial vaccine is 94.5%.

In this context, the mood of market venture capital soars, the role of precious metals in risk aversion is weakened, and investors generally transfer held assets to risky assets in pursuit of higher returns. The result is that precious metals have been weak in recent days and their positions have fallen. Among them, silver ETF positions continued to decline, as of the 17th, silver ETF positions 17622.66 tons, a decrease of 49.17 tons compared with the previous day.

Investment in silver coins and bars will hit a five-year high this year, and silver holdings in exchange-traded fund (ETF) will increase by 350 million ounces to a record high of 1.1 billion ounces, according to industry reports. Demand for silver in industries such as jewelry, silverware and solar panels will fall sharply after the novel coronavirus epidemic disrupts the global economy, according to the World Silver Association. At the same time, the epidemic has also disrupted the mining industry, leading to a reduction in the supply of silver. Holdings, taking into account the shortage of ETF, in 2020, will reach 318.5 million ounces. Investment demand has pushed silver up nearly 40 per cent this year to about $25 an ounce, the highest level since 2013.

Although the trend of precious metals is weak in the short term, judging from economic data and the current performance of the epidemic, the main factor troubling the economic recovery of economies such as Europe and the Americas is the epidemic, and some European countries have announced that they will blockade cities again. Therefore, as long as the epidemic does not improve significantly, loose monetary policy is still the main means to stimulate the economy. Coupled with the fact that the US election is almost over and the agreement reached in the Fed's stimulus package goes a step further, precious metals prices still have support for a long time.