| Precious metals rise in price due to the establishment of a specialized silver trading fund Prices for precious metals have been breaking records in recent days. Since the beginning of the year, the price of gold has increased by more than 7% and now almost reaches $590 per troy ounce, platinum has also risen in price by 7%, and at the end of last week its price rose to a historical high of $1,095 per troy ounce. Silver quotations have increased most noticeably since the beginning of the year - by 13%, to $11.75 per ounce. Some Western analysts believe that silver prices are rising due to the decision to open a specialized silver trading fund (silver exchanged-traded fund), which will deal only with trading of silver - physical metal, futures and shares of "silver" companies. And following silver, other precious metals are rising in price.
The establishment of a specialized silver trading fund, similar to the “gold” fund, has been talked about for a long time. Analysts are confident that its creation will attract investors to the industry, because silver, unlike gold, is not only an exchange metal, but also an industrial metal, and it has a unique specificity of trade. However, some experts, notably Bill O'Neil of Logic Advisors, are of the opinion that while fund creation is a positive factor for the silver market, it is not the dominant factor. "At the end of the day, this is just a tool for trading silver, not a new way to use the metal, and the fund will not change the underlying fundamentals of the market," Mr. O'Neill said.
According to Troika Dialog analyst Vasily Nikolaev, the fund will, of course, draw the attention of new buyers to silver: “The securitization of any exchange-traded commodity attracts more investors to it, whose demand can raise prices up.” Given that, in general, precious metals are derivatives of each other, an increase in silver prices will one way or another affect the movement of the entire market.
The US Securities and Exchange Commission previously rejected the decision to create a specialized silver trading fund, but at the end of March information appeared on the market that it had given preliminary approval. In anticipation of further news about the creation of the fund, silver has been growing more confidently over the past two weeks. Market participants believe that with final approval, silver prices will rise even further.
However, a number of experts, in particular from JP Morgan, believe that immediately after the fund is established, the silver market may cool down. “We expect silver prices to rise before the fund opens and for several months thereafter,” JP Morgan said, “but are confident that they will decline by 7 months within three months of the fund opening.” --10%". This in turn can correct the entire precious metals market.
At the same time, analysts believe that the creation of the fund is unlikely to seriously affect the activities of silver companies. In Russia, there is actually only one such company so far - this is the St. Petersburg-based Polymetal Research and Production Association. But its shares are not traded on exchanges, and it sells its silver mainly through intermediaries or through direct deliveries. Anna LANDER |
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