What Made Silver Go Up, Update 20 Oct 2017

Silver’s move on October 19th was more extreme than gold’s (see here for an explanation of gold’s price action). The price move was four times as great. What of the basis move?

The basis move was also correspondingly larger: 30bps vs. 7bps. Again, it uncannily tracks the price. Unlike gold—for whatever it’s worth—the silver basis does not subside late in the day.

Speculators, using leverage to buy futures, bet that lower unemployment claims should mean a silver price 2% higher. As always, we don’t recommend a naked short of either metal. Congratulations if you had your finger on the buy button at 13:00 GMT. But we certainly don’t recommend buying this move, now at $17.26.

© 2017 Monetary Metals