CFTC-Comex silver speculators raise net long position by 5,419 contracts to 34,205 in week to August 26

CFTC-Comex silver speculators raise net long position by 5,419 contracts to 34,205 in week to August 26

In a significant move, the Commitments of Traders (COT) report for the week ending August 26 revealed that silver speculators have increased their net long position by 5,419 contracts to a total of 34,205 contracts. This surge in long positions indicates a growing optimism among investors in the silver market, driven by a combination of geopolitical tensions and expectations of further Federal Reserve rate cuts.

The silver market has been on a robust upward trajectory, with prices hitting record highs in recent months. According to data from the CME Group, silver futures for December delivery have been trending higher, pausing just below this year’s high. This pause is seen as a temporary respite rather than a bearish signal, suggesting that bulls are preparing for another significant push higher [2].

The geopolitical landscape remains a key driver for the silver market. While no major conflicts are currently brewing, several elements are simmering, which could potentially escalate in the coming months. Additionally, the stock and financial markets are historically volatile during the months of September and October, which could further boost demand for safe-haven assets like silver [2].

The Federal Reserve's inflation data, released recently, has also contributed to the upward momentum in the silver market. The core PCE price index, a key indicator of underlying inflation, rose by 0.3% month-over-month in July and by 2.9% year-over-year. This data has heightened expectations that the Fed will lower interest rates, potentially making silver, a non-yielding asset, more attractive to investors [1].

The latest COT report also shows that the net short position held by commercial traders has decreased, indicating a shift in sentiment among these participants. This change in positioning, combined with the growing optimism among speculators, suggests that the silver market may continue its upward trend.

As investors continue to monitor the geopolitical landscape and the Federal Reserve's monetary policy, the silver market is poised for further volatility and potentially higher prices. The increasing net long position among silver speculators reflects a bullish outlook that could translate into significant price movements in the coming months.

References:
[1] https://www.nasdaq.com/articles/gold-jumps-us-pce-data-increases-rate-cut-expectations
[2] https://www.barchart.com/story/news/34396334/1-way-to-trade-silver-as-the-precious-metal-keeps-heading-for-record-highs