📌 Silver has a tough year, down 16% YTD.
📌Spec positioning in Comex silver is extremely negative, the CFTC shows.
📌Contrary to gold, silver-ETF investors are value-driven, FastMarkets’ estimates show.
📌I expect silver to win its fight against the present bearish momentum.
📌I propose SLV to take advantage of a potential rally in spot silver prices in Q4 2018.
Introduction
Welcome to my Silver Weekly.
In this brief report, I wish to discuss my views about the silver market through the iShares Silver Trust ETF (SLV). SLV is the largest silver ETF and is directly impacted by the vagaries of silver spot prices because the Funds physically holds silver in London.
To do so, I start by analysing the changes in speculative positions in Comex silver futures contracts (based on the CFTC statistics) and ETF holdings (based on FastMarkets’ estimates) in order to draw some interpretations about investor and speculator behavior. Then I discuss my global macro view and the implication for monetary demand for spot silver prices and this SLV. I conclude the report by sharing my trading positioning.
The CFTC statistics are public and free. The CFTC publishes its Commitment of Traders report (COTR) every Friday, which covers data from the week ending the previous Tuesday. In this COTR, I analyze the speculative positioning – that is, the positions held by the speculative community, called “non-commercials” in the legacy COTR (which tracks data since 1986).
The data about silver ETF holdings are from FastMarkets, an independent metals agency which tracks ETF holdings across the precious metals complex. FastMarkets tracks on a daily basis a total of 15 silver ETFs, whose silver holdings represent the majority of total silver ETF holdings. The largest silver ETF tracked by Fastmarkets is the iShares Silver Trust ETF, whose holdings represents roughly 50% of total silver ETF holdings.
