Last week, silver finally broke its five weeks streak of losses to post a striking gain of over 7%, as controversy returned to the markets.
Analysts comment that silver has found a bottom, from which the only direction is higher. Data shows the commercial short position is at its lowest level since April 2009. The market is void of speculation, because open interest is down 29% from its high and now stands at a one-year low.
Sentiment for silver remains supportive seeing as it the metal price failed to close below $33 over the past two months.
The continuing increase in demand for precious metals in both China and India is evident. In India, gold and silver imports surged 200%. Silver prices in India have remained strong due to robust demand and a lack of supply in the global markets. Demand for silver is rising due to its cheapness in comparison to gold and due to current conditions generating better returns.
The gold:silver ratio stands at around 42.2, down from around 43.7 last week, highlighting silver‘s performance despite old adding around 3.5% throughout the week.