Thomson Reuters GFMS Key Silver Market Developments:
Date of Release: 4th May 2012
IMPORTANT NOTE: The following is for informational purposes only and was developed by Thomson Reuters GFMS. It does not take into account the investment objectives, financial situation or particular needs of any particular person. Information is from sources believed to be reliable, but is not guaranteed as to its accuracy or completeness. Opinions and estimates are the judgment of Thomson Reuters GFMS and are subject to change without notice. Distribution of this information does not constitute agreement with, or an endorsement of, the views expressed. Obviously, future outcomes are impossible to predict with certainty. Investors should obtain advice based on their own individual circumstances and understand the risks before making any investment decisions.
After posting an impressive increase in late January, silver entered a period of consolidation, as the price was largely confined within a narrow $33-34 range through to 21st February. However, as gold started to rally from the 22nd onwards, silver responded positively By end-month, the white metal had already reached a five-month high of $37.23/oz, although the bulk of these gains were later wiped out by heavy investor selling at the end of last month.
Following a brief rally to the high for the month of $32.97 on the 3rd, silver fell below $32 the following day and then spent the rest of april trading sideways in a tight range of $30.70 -$32.36. however, early May saw silver drop below the lower end of that range, with the metal trading just around the $30 mark at the time of writing.
The gold:silver ratio was largely confined within a narrow 51-52 band in april until the final week of the month when the yellow metal started to outperform silver. This subsequently sent the ratio to 54 in late april and early May.
Silver’s lacklustre price performance was partly due to the ongoing long liquidation by investors in the futures market. On comex, in particular, net ‘investor’ long positions fell by a quarter in april to a three-month low of 3,476 tonnes by end-month.
Modest liquidations also emerged in silver eTf holdings. With a net decline of 180 tonnes in april, combined silver eTfs fell to 18,165 tonnes by end-month.
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