See: Was Fed’s Powell dovish or not? 4 key takeaways from Wednesday’s press conferenceīecause of Powell’s comments, “we could see the Fed start to pivot” toward a slower pace of rate hikes, said Daniel Ghali, the director of commodity strategy with TD Securities. Traders have interpreted Powell’s vague guidance as opening the door to a rate hike of just 50 basis points in September after the Fed opted for 75 basis point hikes in June and July. Gold and silver both benefitted from Federal Reserve Chairman Jerome Powell’s comment on Wednesday that the next interest rate hike in September would depend on the tenor of upcoming U.S. 1, 2021, according to Dow Jones Market Data.įor October delivery lost 40 cents, or nearly 0.1%, to $876.80 per ounce, while September palladium Silver hasn’t seen a daily percentage gain of this size since Feb. That was the biggest one-day percentage gain for a most-active contract since March, FactSet data show.įor September delivery added $1.27, or 6.8%, to settle at $19.868 an ounce, for the highest finish since June 30. Price actionįor October delivery gained $31.20, or 1.8%, to settle at $1,750.30 per ounce. The market may face short term issues moving silver in the right forms to the right vaults, but draining liquidity enough to send prices to $100 or $1,000 will be difficult."It's like trying to drain the ocean," said a trader in London.Gold and silver rose sharply on Thursday, with gold logging its biggest one-day percentage gain since March and silver rallying by nearly 7% to finish at its highest price in a month. It will also be hard for retail investors to create a lasting supply squeeze, analysts and traders say.Īround half a billion ounces of silver trade each day in the London OTC market, the world's biggest, of which two thirds are spot contracts, and around 1 billion ounces are produced and consumed each year with surplus supply for most of the last decade, consultants Metals Focus said. Most hedge funds and other money managers with positions in silver were already long, betting that the coronavirus pandemic and its aftermath would lift prices. silver futures, these tend to be balanced against long positions in the London Over-The-Counter (OTC) market. While many bullion-trading banks have large short positions in U.S. Unlike GameStop, there are no holders of massive silver short positions who can be forced to abandon them in big enough numbers to send prices though the roof. In 1979-80 the brothers William, Nelson and Lamar Hunt amassed billions of dollars' worth of the metal, pushing prices to record levels before regulators stepped in and the market collapsed.Ī short squeeze is unlikely. This is not the first attempt to bid up silver. Silver prices were up more than 9% on Monday, their biggest daily gain since 2008. Smaller silver ETFs also saw a boom in activity. Nonetheless, silver mining equities leaped and bar and coin sellers were swamped with orders, in addition to the almost $1 billion that flowed into the iShares Silver Trust in a single day on Friday.Īs a result of these inflows and to back new shares, the ETF added 34 million ounces of silver to its stockpile, taking it to a total of 601 million ounces. Buying shares in mining companies has no impact on silver demand. Investors can also buy from retailers of bars and coins, but these are relatively small compared to the wholesale market and stock is limited. Pharma Industry Conclave Unlocking opportunities in Metal and MiningĮxchange traded funds are the easiest way for retail investors who tend not to have access to futures and interbank markets to generate unlimited immediate demand for silver.
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