RE: Shorts cleared29 Jan 2026 20:18
From Bloomberg article today -
Speculative demand from Chinese investors — highlighted by premiums that local prices have commanded over global benchmarks — helped drag global prices higher.
There have been other signs of massive demand, too. China’s only pure-play silver fund halted trading briefly this week and turned away new customers, with warnings that the premium over Shanghai Futures Exchange contracts is “unsustainable.”
Chinese retail investors tend to be trend-following, like traders in US futures and derivatives markets, Citigroup Inc. wrote earlier this week. The bank predicted that strong buying would continue “due to robust short-term momentum,” while forecasting that silver would hit $150 within three months.
Silver ETFs Buck Price Spike
Gold prices have risen alongside demand from exchange-traded funds backed by the metal. But silver’s recent rapid gains have come despite ETF outflows. Almost 30 million ounces — worth over $3 billion at current prices — have poured out since the start of January, data compiled by Bloomberg show. That helped ease tightness in the dominant spot trading hub of London.
It’s a bit of a puzzle how prices soared so much as silver ETFs saw those outflows. Since ETFs are a popular way for retail and institutional investors to get exposure, the divergence suggests other sources of demand have been driving silver higher. That includes physical bar and coin purchases and demand from Chinese buyers.
ETF trading has been frenetic, however. The iShares Silver Trust, the largest silver-backed fund, recorded almost $40 billion in turnover on Monday, almost on a par with the State Street SPDR S&P 500 product and exceeding the $23 billion of trading in Nvidia Corp. stock or Tesla Inc.’s $22 billion in turnover.
A few months ago, daily trading in the iShares silver ETF was about $2 billion, before it increased to around $10 billion in late December.
The options market is another example of the speculative fervor sweeping precious metals. Call options, which give holders the right to buy at a pre-determined price and time, are seen by some investors as a cheap way to bet on market upside.
For the iShares Silver Trust, total call volume hit a record high on Monday. The cost of buying calls on silver futures relative to the cost of buying equivalent puts, which protect against price declines, also jumped to historical highs in January. That points to a wave of bullish bets.
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