Gold and silver explode again. And although the yellow metal continues to attract much attention, perhaps you have to focus more on the white metal, as the Saudi Central Bank did.
Yellow fever seems not to stop. It seems that weeks ago, a respite was taken, to return to drink impulse covered in any global excuse. The truth is that the prices of the Gold Futures Comex achieved a historical maximum of $ 3,631, the ounce, based on December. However, the Silver ComEX of December was not far behind and reached a maximum in 14 years of $ 42.29 an ounce. There is no doubt that the demand for shelter assets, in a more nervous general market, is promoting the markets of precious metals. The prices of both precious metals have more than duplicated in the last three years, driven by the growing geopolitical risks, including world trade disturbances caused by US tariffs. In this regard, There are several factors that explain the upward trend according to experts in the world metal market such as the expectation of lower interest rates in the US, the instability of the global bond marketand also the most veterans know that September and October can be difficult months for world markets.
But, as days ago, this newspaper highlighted the qualified one, by the experts, “revolutionary” demand for gold after the Harvard University Investment Fund (Harvard Management Company) established a considerable position in SPDR Gold Shares, the ETF fund supported by the world’s largest gold, it is now worth noting that this was not the only important purchase of precious metals made during the second quarter. According to Report 13F of the Central Bank of Saudi Arabia (Saudi Central Bank) it was learned that he invested 30.5 million dollars in the “Ishares Silver Trust” and almost 10 million dollars in the “ETF Global X Silver Miners”. The 13F documents presented before the Bag and Securities Commission (SEC) show that the Saudi Central Bank bought 932,000 shares of Ishares Silver Trust in the second quarter, valued at 30,578 million dollars, plus another 203,700 shares of the Global ETF X Silver Miners, valued at 9.8 million dollars.
While this remains a bullish signal for silver and highlights the growing investment demand, some comments on social networks have exaggerated investment, speculating that it is a movement to re-mimet the precious metal, experts point out.
However, the Saudi Central Bank also manages the country’s sovereign investment fund and, according to some analysts, it is more likely that the investment has been made through said fund. According to the SEC archives, document 13F was presented by Maameyaa Kwafo-Akoto, partner of A&A Shearman, a company that advises sovereign investment funds, central banks, “Family Offices”, insurance companies, pension funds and financial institutions of development around the world in their investment agreements. Anyway, the bet in La Plata is still one of the minors in relative terms within the total ETF portfolio. The truth is that this movement is bullish for silver, and although an important context is needed, there is a growing choir of analysts that maintains that this demonstrates the metal investment value, positioning it as more than a commitment to industrial growth. Analysts point out that the attractiveness of silver resides in its gold -related value. While the gold/silver ratio has fallen drastically since its April maximum, exceeding 104, it remains high, above 86. It is worth noting that historically, the relationship has averaged between 50 and 60.
But the great disadvantage of La Plata has been its lack of institutional interest. When the funds seek to invest in an active refuge, they traditionally resort to gold, the favorite monetary metal of the central banks. The challenge with silver is that its market is only half the size of the gold market, which makes it much more volatile. However, the strong point of silver investment traditionally comes from retail investors, who cannot afford $ 3,500 in a gold coin of an ounce.
The fact that a sovereign background of wealth now see value in silver could be a radical change for precious metal, they warn in the world market.
In this context, some analysts point out that if a central bank would like to re-conform the silver, you would buy the physical metal and not a derivative in paper. At present, only Russia announced its active participation in the La Plata market. For example, in 2024 the Russian government announced that it was considering investing 51,000 million rubles (535.5 million dollars) over the next three years to replace its precious metal reserves, including silver and metals of the platinum group. In this regard, it should be remembered that, at the annual precious metal conference of the LBMA last year, there was a debate between representatives of the Central Bank of Mongolia, the Czech National Bank and the Bank of Mexico on La Plata. The central banks of Mongolia and the Czech Republic said that silver is too volatile to keep it as a monetary metal. Meanwhile, the Central Bank of Mexico has silver reserves, since mining is an important part of the national economy, in addition Mexico is the main producer of silver in the world.
Silver was also at the center of attention, of this conference, in the panel moderated by Jonathan Butler (Mitsubishi) with experts Mitchell Krebs (Coeur mining), Danielle Oliari (CNT DEPOSITARY), Matt Watson (Priceus Metals Commodity Management) and Darshana Thacker (Ames Goldsmith), who shared optimistic perspectives on the future of white metal, given their wide range of uses and properties, and their relationship with gold. Matt described it as the “universal metal” of the periodic table, and Mitchell, as the “anonymous hero” of the energy transition.
One more element that supports the current bullish trend of the prices of both metals, in addition to the probable lower rates in the US, and the instability of the bond market (the yields of the global bonds are upwards, mainly due to the concern for inflation, sales of public debt and fiscal discipline). It happens that the fall in bond prices reflects the concern of operators for excessive public spending and their possible inflationary impacts. To this is added the uncertainty about the independence of the Fed that does nothing but aggravate the pressures of the bond market and the general anxiety of operators and investors, after the intimidation of the president Donald Trump About the head of the Fed, Jerome Powelland the decision to fire the governor of the Fed, Lisa Cook. A non -independent Fed could have the negative consequences that important foreign buyers, including sovereign countries, move away from US Treasury bonds due to FED politicization, which would imply higher indebtedness costs for the US government, and probably also for US citizens.
That’s why It is useful to remember that history shows that September and October can be difficult months for stock, financial and exchange sectors. The month with the worst performance of the American stock market is September, which generates an environment of uncertainty in variable income, which is positive for metals considered refuge, from the perspective of competition between asset classes.
Source: Ambito
