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Informist, Thursday, Jun. 12, 2025

 

MUMBAI – Silver prices have broken above the key technical resistance of $35 per ounce on the COMEX and have rallied over 6% since Jun. 5, supported by robust industrial demand and sustained deficit in the global market. The prices could rise further to $40 per ounce in 2025 due to the distortions between the New York and London markets, Daniel Ghali, senior commodity strategist at TD Securities, was quoted as saying by Kitco.

 

"Right now, the silver market is buzzing with excitement because prices broke through $35 an ounce," Ghali said. "That's been very difficult to break through over the last several years. The last time silver prices broke through this level, we traded $50 an ounce within six weeks, so of course, the excitement is building," he added. "We think this has been a long time coming. And we think the current market structure favors these kinds of mini-squeeze events going forward."

 

Ghali said the rally in silver was caused in part by an imbalance between the major trading hubs of London and New York, and the breakout above $35 represents a psychological shift in the physical market. "The fact that last time we broke through this level, we rallied very substantially thereafter might start to attract subsequent ETF inflows," Ghali said. "Those ETF inflows are increasingly draining what little is left in the world's largest bullion vaulting system for silver out of London. You have to think about this massive imbalance that has occurred as a result of the threat of tariffs earlier this year. A tidal wave of metal moved from London into New York because the relative prices between New York silver and London silver incentivize that move."

 

"We're now left with a market structure in which London is critically scarce," Ghali added. "There's less silver that is freely available for purchase in London than is typically traded on any given day, and meanwhile, you have this oversupply in New York. And yet, London markets aren't pricing that scarcity, and the markets as a whole aren't pricing the incentives required for the metal to flow back to where it's actually physically traded." This structure is going to catalyse a series of rolling mini squeezes, which should support a higher trend in prices, he added.

 

Ghali expects silver prices to gain another 10% this year. "We forecast higher silver prices on the horizon. We think that we could trade $40 an ounce before the end of this year." At 1444 IST, the most-active July silver contract on the COMEX was 0.7% lower at $36.02 per ounce.  End

 

US$1 = INR 85.58

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Ashish Shirke

 

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