Silver Climbs to Highest Since May After Entering Bull Market

  • Silver ETF holdings are approaching an all-time high
  • `We’re in bull market territory' says TD Securities' Melek

Will Gold Rally as Forecast?

Silver futures advanced to the highest since May, a day after entering a bull market, as demand for exchange-traded funds backed by the metal approached a record.

Holdings in silver ETFs climbed to 19,904.1 metric tons, nearing an all-time high of 20,182.2 tons reached in 2014. Silver futures have jumped 11 percent this month, among the best performances in the Bloomberg Commodity Index, helped by improving demand prospects for the metal in industrial uses. Aggregate trading on Wednesday was more than double the 100-day average for this time.

Silver and gold are favorites in commodities trading this year, with gains exceeding 18 percent, as speculation that the Federal Reserve will be slow to raise U.S. interest rates boosts demand for the metals as stores of value. Money managers last week increased their bullish positions in silver to the highest since comparable data from the Commodity Futures Trading Commission begins in 2006.

“Silver here is playing a little bit of catch-up to gold,” which entered a bull market in March, Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “We’ve seen a surge higher on the silver ETFs, and I think it’s a case where you have monetary fundamentals creating an incubating environment for silver to catch up and move higher.”

Silver futures for May delivery rose 1 percent to settle at $17.135 an ounce at 1:47 p.m. on the Comex in New York, after advancing to $17.255, the highest since May 22. The settlement price on Tuesday marked a more-than 20 percent gain from a recent closing low in December, meeting the common definition of a bull market.

In other metals:

  • Gold futures for June delivery rose less than 0.1 percent to $1,254.40 an ounce on the Comex.
  • On the New York Mercantile Exchange, platinum and palladium gained.
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