🥈 Silver leads precious metals rally

Silver gains 1.5% today but upbeat moods can be found on the all metals markets, especially precious metals markets. Some G7 countries announced that they will ban imports of gold from Russia. Russia is the third largest gold producer in the world and also ranks as third by the size of proven reserves. However, gold exports from Russia were already shrinking in recent years and have dropped further in the aftermath of the Russian invasion of Ukraine. Having said that, the impact of this G7 action on gold fundamentals will be limited.

On the other hand, weak data on Chinese industrial profits for May have once again reignited hopes that Chinese authorities will provide more support for the economy. Apart from a strong rebound on silver, we also observe a 0.5% gain on the gold market, 0.6% gain on the copper market and 1% gain on the iron ore market.

Fundamentals for silver are mixed. On one hand, it is expected that this year will result in the largest silver market deficit in over 10 years. On the other hand, investment demand is weakish with recent data showing ETFs selling out their silver holdings.

Silver gains for the second session in a row and approaches a downward trendline. Moreover, a potential double bottom can be seen on the weekly interval and the situation starts to resemble one from the final quarter of 2021. A recovery in silver prices may also be driven by quarter-end rebalancing. Source: xStation5