Finally, the big money in silver has also revealed itself. And this time they entered the market quite aggressively, winning big right away.
On February 2, iShares Silver Trust (SLV) – the largest silver fund in the world – threw nearly 3 billion USD into the market in just 1 day, equivalent to about 500 tons of silver.
The amount purchased on this day was the largest since the fund was established, nearly pulling back all the silver SLV had sold since the beginning of the year. In other words, whatever they sold off, they are now gathering back nearly all of it.
After this buying phase, the amount of silver SLV holds has returned to over 16,500 tons, equivalent to about 44 billion USD at current prices.
Timing is perfect: occurring right after the strongest drop in silver prices in decades.
The current price is around 80 USD/oz, quite a bit lower than the peak of over 120 USD/oz at the end of January, but when looking broadly, it is still about 150% higher than the same time last year.
The recent drop was not random. The market trembled when news broke that Kevin Warsh – a figure with a very hawkish monetary stance – was chosen as the Fed Chair. The scenario of the Fed tightening again caused gold and silver to be heavily sold off, which was greatly exaggerated.
With silver, which is a playground for speculators and high leverage, prices just need to break for margin calls to trigger en masse, creating a chain reaction of sell-offs.
Silver is no longer just a safe haven like gold. Most demand comes from industries like solar power, electric vehicles, and electronics – all sectors that are growing, but silver supply cannot expand quickly due to dependence on mining. This mismatch makes silver very prone to strong fluctuations when large amounts of money flow in.
$XAG is a type of asset that moves very sharply: it rises quickly, and when it shakes, it does so very violently, especially in a highly leveraged environment – this has been clearly demonstrated in previous cycles.
Additionally, the gold/silver ratio is still below 60, meaning if the commodity cycle continues, silver has the potential to run faster than it did in previous cycle phases.
What do you think about this move from SLV?
#GoldSilverRebound #MarketCorrection #PreciousMetalsTurbulence