![]() ![]() The RBC team also noted that during previous silver price cycles in 20, silver prices outperformed silver stocks when prices climbed rapidly. For example, Endeavour Silver Corp (NYSE: EXK) is down by about 6%, while Fortuna Silver Mines Inc (NYSE: FSM) is down by about 5%. Silver stocks that were impacted by the attempt at a short squeeze are also falling. The iShares Silver Trust is down more than 2%, and silver prices have fallen slightly to around $26 an ounce. Indeed, it looks like the silver price is already starting to come down today. They also point out that unlike gold, silver demand is mostly industrial, and growth in solar, autos and other end markets have supported it.Īdditionally, CME, the biggest derivatives market in the world, raised margins on silver as prices approached an eight-year high earlier this week.īased on previous swings in the silver price, the RBC team said price gains from the attempt at a silver squeeze would likely be short-lived. The RBC team believes the short squeeze narrative is a mischaracterization of what happened, although it could still have a short-term impact on prices, which has occurred in the past. The silver market is one-tenth the size of the gold market, and in the past, high speculative interest and the inelastic nature of supply resulted in sizable swings in the price. They point out that silver is a smaller and unique market prone to volatile price cycles. ![]() Effects on the Silver MarketĮven though the short squeeze comparison is not accurate, the RBC team noted that the increase in searches and social media trends for silver would likely have a near-term impact on silver prices and silver stocks. They noted that above-ground silver is valued at about $1.7 trillion, which is much larger than any of those equities. Unlike the affected stocks, positioning on silver was not bearish. ![]() Wolfson and his team noted that comparisons between what happened in the silver market and the short squeezes in the stock market don’t make sense. Searches for “SLV” were also up sharply after falling in the second half of last year. They also pointed out that searches for silver grew sharply over the last week, while the hashtag #silversqueeze trended on Twitter. Over the past year, its daily flows have averaged $41 million. On Monday, the ETF added almost 18.6 million ounces. The RBC team noted that inflows into the iShares Silver Trust (NYSEARCA: SLV), the largest physical silver exchange-traded fund, hit a record $943 million on Friday. Sorting Out Fact from Fiction in the Silver Squeeze He holds a PhD in Economics, CIIA financial analyst title, with a post graduate degree in IESE and a master’s degree in economic investigation (UCV).In a report this week, RBC Capital Markets analyst Josh Wolfson and his team said the silver squeeze narrative is a “mischaracterization of current market positioning.” They added that crowding probably wouldn’t result in soaring silver prices like what happened to GameStop and other heavily shorted stocks. Mr Lacalle also contributes at CNBC, World Economic Forum, Epoch Times, Mises Institute, Hedgeye, Zero Hedge, Focus Economics, Seeking Alpha, El Español, The Commentator, and The Wall Street Journal. He is also author of the best-selling books: “Life In The Financial Markets” (Wiley, 2014), translated to Portuguese and Spanish “ The Energy World Is Flat” (Wiley, 2014, with Diego Parrilla), translated to Portuguese and Chinese “Escape from the Central Bank Trap” (2017, BEP), translated to Spanish. He was voted Top 3 Generalist and Number 1 Pan-European Buyside Individual in Oil & Gas in Thomson Reuters’ Extel Survey in 2011, the leading survey among companies and financial institutions. Mr Lacalle has more than 24 years of experience in the energy and finance sectors, including experience in North Africa, Latin America and the Middle East. He is currently a fund manager overseeing equities, bonds and commodities. Lacalle has presented and given keynote speeches at the most prestigious forums globally including the Federal Reserve in Houston, the Heritage Foundation in Washington, London School of Economics, Funds Society Forum in Miami, World Economic Forum, Forecast Summit in Peru, Mining Show in Dubai, Our Crowd in Jerusalem, Nordea Investor Summit in Oslo, and many others. He is Chief Economist at Tressis SV, Fund Manager at Adriza International Opportunities, Member of the advisory board of the Rafael del Pino foundation, Commissioner of the Community of Madrid in London, President of Instituto Mises Hispano and Professor at IE Business School, London School of Economics, IEB and UNED. Daniel Lacalle is one the most influential economists in the world. ![]()
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