The price of silver has surged $3 in the past 12 trading days because India is creating a short squeeze in the silver market. This is a demand driven situation that threatens to send the price of silver soaring in the short-term. And take a look at what is happening with gold…
Silver Stars
March 15 (King World News) – Alasdair Macleod: After
a powerful up-move last week, this week gold had a minor correction.
Silver’s upward momentum continued through to Wednesday before it ticked
off the top. In European trade this morning gold traded at $2168, down
$11, and silver at $25.05, up 65 cents.
India Creating Short Squeeze In The Silver Market
They key to this activity is India. The Indian government introduced a
solar production linked incentive scheme. Reliance Industries, among
others, are investing heavily in photovoltaic production, and is
commissioning the first 5 giga-watt phase of a 20 GW manufacturing
facility scheduled for opening this month. I am informed by industry
sources that being unable to source sufficient silver from refiners,
Reliance has been buying what it can in silver markets, including Comex.
It is almost certainly Reliance which is taking the bulk of that 1,201
tonnes and the acceleration of deliveries this month reflects the
commissioning of Phase 1 in Jamnagar.
Shorts Losing Their Grip On Silver
It seems extraordinary that with the massive increase in global
ESG-related demand that the silver price has not yet risen
significantly. But as I explained in a post to my Substack subscribers
this week, China has deliberately suppressed the silver price while
importing significant quantities to bolster its photovoltaic production.
Now that India is rapidly developing its output under government
schemes, China is likely to lose its grip on price.
From the breakout, which is near current levels, pattern analysis suggests a move out reflects the move in, giving a price objective of $40.
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