CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money before trading CFDs.

What’s Causing the Silver Surge?

February 2, 2021

Silver saw another surge in prices, with spot prices rising as much as 11.5% at one stage, and trading briefly above $30/oz for the first time since 2013. Retail demand has increased significantly, with large inflows into silver ETF’s. The iShares Silver Trust exchange-traded fund (largest silver-backed ETF) witnessed inflows of nearly US$944 million on Friday, while total known silver ETF holdings increased by almost 35moz yesterday to total nearly 940moz.

A number of retail dealers said that they were unable to process orders until Asian markets opened yesterday due to the extraordinary demand for bars and coins. Demand was almost six times more than a normal day on Monday and dealers expect existing premiums to rise quickly in the current scenario. Meanwhile, the US Mint on American Eagle silver-coin sales showed that total sales jumped 24% in January; the largest monthly sales for a January since 2017. While we have already seen a significant rally in silver, one has to question how much more it can be squeezed, with the biggest hurdle being the sheer size of the market. If we look at daily average volumes on Comex silver since the start of 2020, they equate to around US$10.97b. Then if we look at positioning data for Comex futures, money managers hold a net long, and so at least from this portion of the market, there is not much to squeeze.

Open an Account. Get started in less than 5 minutes