The silver price (spot) is up by over half a percent in mid week trade in London. An ounce of silver is going for $36.15.
The gold price is however under-performing silver, an ounce of gold is only about 10pc higher on the day at $1340.
Commenting on the differential between gold and silver prices, David Morrison at GFT says:
"It is silver which has experienced the biggest rally recently amid talks of a massive short-squeeze taking place on COMEX.
"Rumours have been flying around for a while now that JP Morgan is stuck with a massive short futures position while there is tightness in the physical market. This has led to backwardation in prices whereby spot silver trades at a premium to future months."
A firm correlation with the VIX index and crude oil prices suggests silver continues to mirror gold’s trading dynamics, acting as a safe-haven amid geopolitically driven risk aversion.
Silver is dramatically outperforming its more expensive counterpart however, with the gold/silver ratio now at a record low. Furthermore, silver ETF holdings began to rebound nearly a month before those of gold put in their recent swing low, suggesting the cheaper metal’s compelling risk/reward parameters will see it continue to attract outsized investment demand.
Technical Outlook: Prices are testing resistance at $36.07 – the 200% Fibonacci extension of January’s downswing. A break above this barrier exposes $37.21. Near-term rising trend line support stands at $35.05, with a move below that exposing $34.23.
