Silver Spikes Near 3-Year High as Comex FOMO Sees Gold Price Hit Fresh Record
Monday, 4/08/2024 15:21
GOLD prices hit fresh all-time highs in all major currencies on Monday, while silver climbed towards a 3-year high against the US Dollar after speculators increased their net bullish positions in Comex futures and options,
writes Atsuko Whitehouse at BullionVault.
Having risen 3.8% across the first week of April – the
fastest gold price rise since the first week of March – spot gold prices in the US Dollar today set another record high at $2351 per Troy ounce as Chinese traders returned to the market following the Qingming festival, before dropping back $25 in London trade to trade unchanged from the weekend.
"Gold's continued focus [is] on momentum and FOMO", says derivatives platform Saxo Bank's strategy team, pointing to the 'fear of missing out' among speculators in futures, options, CFDs and other leveraged contracts as gold prices rise.
Silver prices also climbed overnight, touching $28.08 per Troy ounce – the highest since June 2021 – before trading 65 cents lower, also back to the weekend's level.
Last week the more industrially-useful metal surged by 9.1% in Dollar terms, its fastest weekly gain at London's midday benchmarking auction since the first-wave Covid crisis in August 2020.
Latest data shows that hedge funds and other leveraged speculators in Comex silver futures and options increased their net bullish bets by 1-in-8 as a group in the week-ending last Tuesday, back up towards mid-March's 100-week high.
That level of 'Managed Money' speculation in Comex silver contracts is nearly 3 times higher than the 1-year average and almost double its 5-year average.
However, speculative betting on silver – net of the Managed Money's bearish bets as a group – remains 1/3rd below the recent
silver speculation peak of early March 2022, when the gold price set what was then a new record high and silver prices surged to $26 per ounce amid Western countries' moving to ban Russian exports following Putin's invasion of Ukraine.
"Silver has a lot of catching up to do on the upside, and [last week's] technical breakout from a multi-year consolidation phase
may well be the start of a long bull market," says one analyst quoted by MarketWatch.
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As in silver, speculators also raised their net bullish betting on Comex gold contracts by 12.9% on the
latest weekly data from US regulator the Commodities Futures Trading Commission (CFTC), taking it to the highest since July 2020.
But while silver's giant bullion-backed ETF the SLV also grew last week – needing its biggest weekly inflow of physical metal since early 2023 and reaching its largest holdings in over 2 months – the largest gold-backed exchange-traded funds continued to shrink as shareholders took profit and liquidated stock.
"Silver is a higher beta [volatility] commodity than gold," says German refining group Heraeus in its latest weekly report. "So if retail investors show more interest as ETF holdings rise, then it could outperform gold."
The SPDR Gold Trust (NYSEArca: GLD) and the iShares gold ETF (NYSEArca: IAU) saw net investor outflows of 0.5% and 1.3% respectively last week, reaching their smallest sizes in nearly 1 month and over 4 years.
Despite those ongoing
gold ETF liquidations, bullion priced in the UK Pound and the Euro today extended their record highs to £1861 and €2169 per Troy ounce before paring some gains.
Gold prices in Japanese Yen, Canadian Dollars, the Austrian Dollar and the Swiss Franc also reached all-time highs overnight Monday, while domestic gold prices in China – the precious metal's No.1 miner, importer, central-bank buyer and household consumer – set a 7th new daily benchmark record in a row at the Shanghai Gold Exchange as the SGE reopened from the Qingming festival holidays to fix at ¥553 per gram.
In March, China's central bank expanded its gold reserve by 5 tonnes in March to 2262 tonnes, making
the 17th consecutive month of increase, according to the mining-industry's World Gold Council.
Chinese silver prices today rose to a new SGE benchmark record at ¥7110 per gram, also extending the precious metal's premium versus London prices to offer new imports an historically strong incentive.
"Industrial demand for silver is forecast to grow this year owing to the expectation that solar installations in China and other markets will maintain their pace," Heraeus says.
Silver industrial fabrication worldwide is
forecast to rise by 4% in 2024 to a fresh record, according to the latest forecast published by the Washington-based Silver Institute of miners, refiners and other supply-chain players.
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