Loading ...As we noted yesterday, investors have been dumping silver at a rapid-fire rate lately, with some attributing the abandonment to the rise of bitcoin. Whatever the motive, the latest Commitment of Traders (CoT) data shows large speculators reduced their net long exposure on silver by nearly 28,000 contracts in the week ended Dec. 5 — the biggest one-week decline ever recorded, per Schaeffer’s Quantitative Analyst Chris Prybal. Below, we take a look at how silver tends to perform after these rare signals.
Regarding CoT positions on silver, there have been just seven weekly declines of more than 20,000 contracts ever, according to Prybal. The last signal of this kind happened in May 2017, and prior to that you’d have to go back to June 2015, which marked the first signal in nearly a decade.
In conclusion, if past is prologue, silver futures could be on the upswing soon. It’s also worth noting that January and February tend to be the best months of the year for silver, with the iShares Silver Trust (SLV) averaging monthly gains of 5.3% and 5.1%, respectively, since inception. At last check, the front-month silver contract was fractionally higher at $15.89 per ounce, off recent five-month lows as dollar-denominated commodities move higher following yesterday’s Fed rate hike.