Silver prices experienced a sharp decline, erasing gains from a recent two-day recovery period. A fresh wave of selling pressure impacted the market, resulting in a substantial drop in spot silver prices. At its lowest point, spot silver plunged as much as 18 per cent, falling below $US23 per ounce before partially recovering. It is currently down by 16.3 per cent, trading at $US23.81.
According to ANZ, the market dynamics are currently influenced by speculative and Commodity Trading Advisor (CTA) positioning, following the build-up of large positions in January. This speculative activity is occurring despite ongoing structural tightness observed in the physical silver market, indicating a disconnect between paper trading and real-world supply dynamics.
The report indicates that significant price volatility is likely to persist until these speculative positions are unwound, potentially leading to further fluctuations in the short term. In comparison, the gold market experienced a more moderate sell-off. This relative stability can be attributed to greater liquidity within the gold market and less aggressive positioning among investors, providing a buffer against extreme price swings.
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