Silver prices soared to unprecedented heights, hitting a record $55 per ounce! This dramatic surge occurred on a Friday, driven by the reopening of the Comex futures and options market in New York, a crucial hub for precious metals trading, after a technical disruption.
Before the Comex resumed operations, silver contracts in Shanghai had already set new records, climbing by 2.0% to ¥12,682 per kilo. This occurred even as the Yuan strengthened against the US Dollar. Meanwhile, gold in China, the world's largest consumer market for the precious metal, saw more modest gains.
In London, silver was fixed at around $53.88 per Troy ounce at midday, matching its second-highest benchmark. But, when US-settled Comex silver and gold futures contracts reopened, the price of silver in London jumped by 2.6% in just over an hour, reaching a peak of $55.30 per Troy ounce.
But here's where it gets controversial... This contrasts with gold, which peaked at $4208 in London spot trade, still below its all-time high.
A trading desk note from Mitsubishi's bullion division highlighted the significant impact of the CME outage on global markets, especially for precious metals. They noted that the timing was particularly unfortunate, coinciding with the end of the month and a shorter trading day in the US due to the Thanksgiving holiday, which led to lower liquidity.
And this is the part most people miss... Stockpiles of silver bullion in Shanghai's warehouses increased for a second day, growing by 5.2%. The iShares Silver Trust (SLV), which holds 80.0% of its bullion in London, expanded to need an additional 324 tonnes this week, the heaviest inflow since late July. With total silver stockpiles in London reported at 26,254 tonnes, the SLV's London backing would account for 47.5% of the world's central bullion trading and storage hub.
Platinum, another industrial precious metal, also saw a surge, reaching a 5-week high of $1660 per Troy ounce as CME's Nymex contracts came back online. Mitsubishi's note suggests a favorable price outlook for platinum despite easing market fundamentals.
Most global stock markets also rose during the CME outage, with the MSCI World Index nearing its all-time high. Shares in the CME Group also saw gains.
The new silver price records pushed the Gold/Silver Ratio below 76 for the first time in almost 18 months.
The CME outage also led to all-time highs for copper, influenced by positive news from the CESCO Shanghai Copper Week conference.
What do you think? Does this indicate a shift in the precious metals market, or is this just a temporary reaction to the CME outage? Share your thoughts in the comments below!
