- Spot silver is consolidating at $ 29.50, just below the eight-year highs set earlier in the session.
- Numerous demand metrics suggest an increase in demand, which is still being driven by small investors tied to Reddit.
Silver Spot (XAG / USD) has continued its recent vertiginous rally on a third day in a row, during which the price of silver has risen from below $ 25.00 per troy ounce, at one point during the European session on Monday morning, above the level of $ 30.00, a rally close to 20%. Since crossing above the 2020 high at $ 29.80 and above the $ 30.00 level to hit eight-year highs on Monday morning, the precious metal has pulled back a bit to trade at $ 29.50, gaining more than 10%. on day.
As US trading gets underway, the bulls may look to continue to climb above $ 30.00, with the next significant area of ​​resistance being the January 2013 high around $ 32.50. Technically speaking, there is clean air up to that point. On the downside, the highs in early January 2021 just below the 28.00 level should offer support.
Retail buyers increasingly favor silver
Silver is being pushed higher for the third day in a row due to continued strong retail demand as WallStreetBets Reddit retail traders turn their attention to silver markets that have faced restrictions from brokers to trade. your favorite highly shortened stocks, like GameStop. Numerous popular posts on the popular WallStreetBets subreddit urged retail investors to buy gold in an effort to force a small contraction in silver markets, which some suggest would “destroy the banks.”
It is not clear whether a short contraction would really destroy the banks; According to data cited by Reuters, the global short interest in silver equates to about 900 million ounces, which is equivalent to one year of global production. Banks and brokers have most of that, Reuters adds, with about 610 million ounces. However, they say it is unclear if they are net short on the metal or if their bets offset very large physical holdings.
It is not just the spot price of silver that is going up. All kinds of alternative indicators of silver demand show an increase in interest; Silver futures were up more than 10% towards $ 29.50 and over the weekend silver bullion and coin exchanges had to impose order restrictions. Meanwhile, retail traders continue to bid on popular silver ETFs; The iShares Silver Trust ETF (SLV) rose about 10% on Monday and the fund’s assets under management rose to more than 600 million troy ounces for the first time, a record jump of more than 37 million. Silver miners also continue to do extraordinarily well; Retail favorite First Majestic Silver Corp (AG) is up another 20% more Monday to more than $ 22 per share, up from around $ 14 per share last Wednesday.
Will the lawsuit last?
Some analysts argue that the comparatively much more subdued interest in gold (XAU / USD was up just 1% on Monday) bodes ill for the longevity of silver’s recent bullish move. ANZ Commodity Strategist Soni Kumari says that “as the gold-silver ratio is at a multi-year low, we see limited room for further superior silver performance.”
Technical Levels
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