As September came to a close, the overall performance of the commodity market was good, with silver standing out as it reached a nearly twelve-year high in price.
The upward momentum of silver seems to be continuing. Adam Koos, President of Libertas Wealth Management Group, stated that silver has always been the market's stable "gold medalist." With the easing of inflation concerns and the rebound in industrial demand, silver is expected to have a second wave of opportunities for price increases.
According to data from Peak Trading Research, silver rose by 9.9% in September, outperforming gold, which rose by 6.2% over the same period.
Other commodities such as natural gas, sugar, and coffee also performed strongly. Natural gas rose by 24% in September, with analysts pointing out that supply tightening and increased demand were the main reasons for the significant price increase, some of which was due to the surge in power demand from artificial intelligence data centers.
Silver prices hit a twelve-year high, and compared to gold, silver is "very cheap."
Currently, silver prices have climbed to a nearly twelve-year high. Although spot silver prices fell slightly today, they remained around $31.4 per ounce.
Peter Spina, founder of SilverSeek.com, pointed out that silver currently has "ideal market conditions" that could likely push its prices to rise significantly further.
He added that silver has experienced structural supply shortages for four consecutive years, with inventories continuously decreasing. Moreover, demand from industries and green metals also provides strong support for silver prices. Spina stated:
Compared to gold, silver looks very cheap. Currently, it takes more than 83 ounces of silver to buy one ounce of gold.The Vice President and Senior Metal Strategist at Zaner Metals also believes that, influenced by global growth risks, although silver has lagged relatively in the summer, the "momentum of gold repeatedly hitting new highs has helped support the silver market," and in September, silver began to catch up with the rise of gold. He said:
As investors return to the silver market, strong industrial demand supports this most environmentally friendly precious metal, and I believe that the potential for silver to rise is far greater than the risk of falling. Silver prices below $30 per ounce now seem very cheap.
Silver fund long positions surge, Goldman Sachs expects silver to start a "catch-up trade"
Due to strong silver demand and continued supply tension, coupled with low US real interest rates and a weak dollar, silver prices have risen significantly recently.
Recently, Goldman Sachs trader Robert Quinn observed that as gold ETFs continue to attract inflows, silver hedge fund long positions are also soaring.
Data shows that before the Federal Reserve meeting in September, silver futures positions surged. Between September 10th and 17th, the silver price rose by 8%, and the net position of traders increased by $2.6 billion, the second-largest increase in the past 5 years. After the Federal Reserve cut interest rates, silver continued to strengthen. Between September 17th and 20th, silver rose by a further 1.7%.
However, compared to gold, silver's position is still relatively low, with a clear room for catch-up. A previous report from Goldman Sachs pointed out that silver is expected to start a "catch-up trade":
Firstly, silver is a key component in the development of artificial intelligence.
Secondly, because the price of silver is negatively correlated with the interest rate path and the trend of the dollar, the Federal Reserve's inclination towards loose monetary policy will have a positive impact on the price of silver.Thirdly, compared to gold, silver has a lower position, with a significant room for catch-up growth.
Lastly, silver is on the verge of breaking through in the coming months.