top of page
Search
Writer's picturesilverbarstacker
Jan 176 min read

Weekly Salivate Metal Silver News Recap: January 17, 2024

Updated: Jan 17

Welcome to another edition of the weekly silver news recap, brought to you by Salivate Metal and summarized by Silver Bar Stacker. In this week’s edition, we will cover some of the most important and interesting developments in the silver market.

Weekly Salivate Metal Silver News Recap:

January 17, 2024


Hedge funds are selling their gold, but they are not bearish on silver


According to the latest data from the Commodity Futures Trading Commission (CFTC), hedge funds have reduced their bullish bets on gold, but they have not increased their bearish bets on silver. This suggests that hedge funds are not pessimistic about the outlook for silver, even as they expect the Federal Reserve to tighten its monetary policy in the coming months.


The CFTC’s disaggregated Commitments of Traders report for the week ending Jan. 6 showed that money managers decreased their speculative gross long positions in Comex gold futures by 20,051 contracts to 134,333. At the same time, short positions increased by only 639 contracts to 45,874. The gold market is net long by 88,459 contracts, the lowest level in two months.


However, the silver market showed a different picture. The disaggregated report showed that money-managed speculative gross long positions in Comex silver futures fell by only 770 contracts to 38,106. At the same time, short positions fell by 4,487 contracts to 24,997. The silver market is net long by 13,109 contracts, the highest level in three months.


The divergence between gold and silver positions indicates that hedge funds are more confident in the prospects of silver, which has a strong industrial demand component, especially from the green energy sector. Silver is also more undervalued than gold, as the gold-to-silver ratio currently stands at 85, well above the historical average of 60.


Silver price movements can be complicated despite its strong real world use case


Silver is a unique metal that has both monetary and industrial attributes. Its price movements can be influenced by a variety of factors, such as supply and demand dynamics, economic indicators, geopolitical influences, market sentiment, technological advancements, environmental considerations, and other key factors.


A recent report by CMS Prime, a forex and CFD broker, explored the dynamics of silver prices, unveiling the factors that shape market movements. The report highlighted the delicate balance between the production and consumption of silver, shedding light on the factors that influence its availability and desirability in the market.


The report also examined the role of silver in the green revolution, noting that silver is a vital component of many renewable energy technologies, such as solar photovoltaic panels, electric vehicles, and hydrogen fuel cells. The report estimated that silver demand from the green energy sector will grow by 87% by 2030, reaching 888 million ounces.


However, the report also acknowledged that silver prices are not solely driven by its industrial applications, but also by its monetary role as a hedge against inflation, currency devaluation, and systemic risk. The report pointed out that silver prices tend to move in tandem with gold prices, as both metals are considered safe-haven assets. The report also noted that silver prices are affected by the strength of the US dollar, the level of interest rates, the performance of the stock market, and the expectations of the Federal Reserve’s monetary policy.


The report concluded that silver prices are complex and multifaceted, and that investors need to consider a holistic view of the market to understand the trends and opportunities in the silver space.


Presidential candidate Vivek Ramaswamy proposes a gold standard


Vivek Ramaswamy, a businessman who is seeking the 2024 Republican presidential nomination, has suggested a bold idea to overhaul the US monetary system: a gold standard. Ramaswamy, who portrays himself as a younger version of Donald Trump and a political outsider, has vowed to close down government agencies, end birthright citizenship, and raise the voting age to 25. He has also called for a constitutional amendment to adopt a gold standard, which would link the US dollar to the value of gold.


Ramaswamy claims that the gold standard would restore fiscal responsibility, limit government spending, and protect the purchasing power of the dollar. He argues that the current fiat currency system, which is based on the trust and confidence in the Federal Reserve, is unsustainable and prone to manipulation and inflation. He also criticizes the Fed’s quantitative easing programs, which have increased the money supply and lowered interest rates, as a form of “stealth taxation” that erodes the wealth of savers and investors.

Ramaswamy’s proposal has drawn mixed reactions from economists and analysts. Some have applauded his courage and vision, while others have rejected his idea as impractical and dangerous. Opponents of the gold standard argue that it would limit the flexibility and independence of the Fed, hamper the ability of the government to respond to economic shocks and crises, and create deflationary pressures and volatility in the economy. They also point out that the supply of gold is not sufficient to support the demand for money in the global economy, and that the prices of gold are subject to speculation and manipulation.


Mexico could run out of silver by 2026, worsening supply deficit


The world’s largest silver producer could mine all of its existing reserves within two years, throwing silver’s global supply-demand balance even further out of whack than it is currently. Mexico has regularly outputted 5,600 tons of white metal over the past 10 years, but has seen its reserves dwindle to just 37,000 tons. If mining continues at the current pace, Mexico’s silver reserves will be exhausted by the end of 2026.


Silver production in Mexico is now declining double digits annually for the first time in almost a decade. This year, output is expected to fall by 16 million ounces because of the suspension of operations at Newmont’s Penasquito mine due to a strike. The situation in Mexico is also complicated by political and regulatory uncertainties, as the government of President Andrés Manuel López Obrador has passed an overhaul of mining laws, including shorter concessions and tighter rules for permits. The reforms have sparked protests and lawsuits from the mining industry, which fears that the changes will jeopardize $9 billion of investment in the next two years.


The decline in Mexican silver production will exacerbate the existing supply deficit in the silver market, which has been driven by the rising demand from industrial and investment sectors. According to the Silver Institute, the global silver market recorded a deficit of 80.1 million ounces in 2023, the second highest on record. The deficit is expected to widen further in 2024, as industrial demand for silver reaches a new record high, driven by the growth of green technologies such as solar energy and electric vehicles.


Demand for recycled silver is increasing with green efforts


As the demand for silver outstrips the supply from mining and scrap sources, the recycling of silver from various end-of-life products is becoming more important and profitable. Recycling silver not only helps to meet the growing demand from industrial and investment sectors, but also contributes to the environmental and social benefits of reducing waste, saving energy, and lowering greenhouse gas emissions.


According to a report by the Silver Institute, the global supply of silver from recycling increased by 10% in 2023, reaching 169.4 million ounces. The report attributed the increase to higher silver prices, improved collection and processing technologies, and increased awareness and participation from consumers and businesses. The report also noted that the COVID-19 pandemic had a positive impact on silver recycling, as lockdowns and social distancing measures encouraged people to declutter their homes and sell their unwanted silver items.


The report identified several sources of silver recycling, such as jewelry, silverware, coins, bars, photographic materials, electronics, batteries, and catalysts. The report estimated that jewelry and silverware accounted for 42% of the total recycled silver in 2023, followed by electronics with 25%, and photographic materials with 17%. The report also highlighted the potential for increasing silver recycling from emerging sources, such as solar panels, LED lights, and electric vehicles, which have high silver content and long lifespans.


The report concluded that silver recycling will play a vital role in meeting the future demand for silver, especially as the world transitions to a low-carbon economy. The report projected that silver recycling will grow by 6% annually over the next decade, reaching 250 million ounces by 2030.



We hope you enjoyed this week’s silver news recap. Stay tuned for more updates and insights from Silver Bar Stacker and Salivate Metal, your trusted partners in silver!






19 views0 comments

Comments

bottom of page