Entering text into the input field will update the search result below

Silver Weekly: Enjoys Jay's Dovish Twist.

Orchid Research profile picture
Orchid Research


  • Silver has rebounded sharply after the Fed’s dovish twist late in November.
  • Speculative longs remain reluctant to build positions, according to CFTC statistics.
  • ETF investors sell silver at an increasing pace, Fastmarkets shows.
  • The macro environment has turned friendlier for the precious metals group since the start of the month, boosting monetary demand for silver.
  • I propose SIVR to play a rally in silver prices in the months ahead.

Twist & Turn, John-Luke Ingleson (Saatchi Art)


Welcome to my Silver Weekly.

In this brief report, I wish to discuss my views about the silver market through the Aberdeen Standard Phys Silver Shares ETF (NYSEARCA:SIVR). SLV is directly impacted by the vagaries of silver spot prices because the fund physically holds silver in London.

To do so, I start by analysing the changes in speculative positions in Comex silver futures contracts (based on the CFTC statistics) and ETF holdings (based on FastMarkets' estimates) in order to draw some interpretations about investor and speculator behavior. Then I discuss my global macro view and the implication for monetary demand for spot silver prices and this SLV. I conclude the report by sharing my trading positioning.

Speculative positions on the Comex

The CFTC statistics are public and free. The CFTC publishes its Commitment of Traders report every Friday, which covers data from the week ending the previous Tuesday. In this COTR, I analyze the speculative positioning, that is, the positions held by the speculative community, called “non-commercials” in the legacy COTR (which tracks data since 1986).

It is important to note that speculative activity rarely involve physical flows. In fact, it is very uncommon for speculators who trade silver futures contracts to take delivery of the physical on the futures contracts they trade. Speculative activity can have a significant impact on spot silver prices due to the great use of leverage taken by speculators. The changes speculative positions in silver futures contracts tend to be much greater than the changes in other components of silver demand like industrial demand although the latter accounts for roughly 50% of total silver demand.

Accordingly, the impact of speculative flows on silver spot prices tends to be relatively more important and volatile, which in turn affect the value

This article was written by

Orchid Research profile picture
Orchid Macro focuses essentially on commodity and macro analysis, using quantitative tools. We conduct research on supply and demand trends across commodities. We also analyze global macro dynamics and their reflexive interactions with the commodity complex. With 10+ years of experience in macro and commodity research, Orchid Research seeks not only to deliver unbiased views and accurate forecasts, but also to identify trade opportunities generating α.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in SIVR over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (3)

ruber-rant profile picture
Don’t buy SIVR... gold just broke major resistance... you’ve got a great support level around 1245 to be long of off... you want to buy calls not sell them as it will want to run for at least a week or so
I am having a hard time swallowing this one. "Bottom line- We are in the initial phase of speculative normalization...." We have been stuck here for 3 months, so it is hard to buy and hold that long without capitulation, or confirmation of a bottom. Secondly the contracts just rolled over from Dec. to Feb. and there is 1% contango, which accounts for some movement but still holding in the channel it's been in since September. Short covering is only because no one wants to hold something that doesn't move. Same said for longs.
The Freak profile picture
I appreciate all the Saatchi of late, Boris... very civilized.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.