Silver futures slipped during the quiet US Thanksgiving trading session, a day after soaring above $53 on dwindling Chinese inventories. The white metal has garnered renewed momentum in recent sessions, fueled by intensifying investment and industrial demand.
March silver futures tumbled $0.192, or 0.36%, to $53.415 per ounce at 12:29 GMT on Thursday on the COMEX division of the New York Mercantile Exchange. Silver prices are on track for a weekly gain of more than 6% and are up almost 83% this year.
Gold, the sister commodity to silver, also took a breather toward the end of the holiday-shortened trading week. January gold futures fell $16.00, or 0.38%, to $4,186.30 per ounce. The yellow metal is also poised for a weekly gain of nearly 3%, lifting its year-to-date gain to above 58%.
Silver has been surging amid growing concerns that China, one of the world’s largest consumers of the white metal, is seeing domestic inventories decline.
New data compiled by ING commodities strategists show that China’s stockpiles fell to the lowest level in ten years.
Shanghai Futures Exchange data show silver on-warrant inventories fell by 9,361 kilograms to 531,211 kilograms as of yesterday, marking their lowest point in a decade.
“The sharp decline reflects large shipments to London, aimed at easing a squeeze that recently pushed prices to record highs. This drawdown follows a surge in Chinese silver exports, which jumped to over 660 tonnes in October, marking an all-time high,” they wrote in a Thursday note.
“Meanwhile, the Shanghai market moved into backwardation, with near-term silver prices trading above later-dated contracts, signalling short-term physical tightness in China.”
A weaker US dollar has also supported the precious metals market because it makes it cheaper for foreign investors to purchase.
The US Dollar Index (DXY), a measure of the greenback against a weighted basket of currencies, was flat at 99.60. However, the index is poised for a weekly loss of 0.5%, adding to this year’s 8% drop.
After reaching a bottom this past summer and gradually rising, the index’s ascent has stalled amid expectations of further Federal Reserve interest rate cuts.
In other metal markets, January copper futures fell $0.0495, or 0.97%, to $5.055 per pound. January platinum futures surged $22.40, or 1.41%, to $1,608.60 an ounce. January palladium futures dipped $5.00, or 0.34%, to $1,457.00 per ounce.