by Adam Hamilton
Silver soared last summer on skyrocketing demand from stock traders stampeding into silver-ETF shares. These huge positions that sure looked speculative initially have largely stayed deployed since, even riding out a silver correction. That implies these holdings are now being viewed as long-term investments. The silver investors’ resoluteness is very bullish for this metal, keeping silver high which fuels growing interest.
Silver has certainly had a wild ride this year, more than living up to its super-speculative reputation. It got sucked into the overwhelming maelstrom of fear from mid-March’s stock panic on governments’ COVID-19 lockdowns, plummeting 35.8% in under a month! The resulting $11.96 nadir was brutal, well below the world’s silver miners’ all-in sustaining costs of production. Silver had been left for dead at that 10.9-year low.
But like a phoenix rising from the ashes, silver’s rebound out of those extreme lows was incredibly violent.