Hedge Funds Bullish on Silver as Hoard Nears Record: Commodities - Bloomberg
Wagers on rising prices jumped 10-fold since June, U.S.
Commodity Futures Trading Commission data show. Investors bought
717.2 metric tons valued at $797 million through exchange-traded
products this quarter, the most in a year, according to data
compiled by Bloomberg. Prices will increase for at least the
next three quarters and average $38 an ounce in the three months
through June, or 9.9 percent more than now, based on the median
of 14 analyst estimates compiled by Bloomberg.
http://online.wsj.com/article/SB10000872396390443916104578019703001560168.html
Central-bank stimulus moves have helped drive silver prices up
sharply in the past two months, and analysts say the metal looks poised
to continue its climb until the end 2013, despite weakening industrial
demand.
Still, analysts caution that silver's movements tend to be volatile.
Silver futures are up 21% since the
beginning of August, settling Wednesday at $33.88 an ounce, largely
driven by demand from investors who anticipated and then cheered the
U.S. Federal Reserve's announcement of a third round of quantitative
easing to stimulate the economy.
QE3 is bullish for gold and silver.
Both metals are often considered hedges against U.S. dollar weakness and
inflation; the liquidity increases from the Fed's stimulus measures
tend to weaken the dollar and raise the potential for inflation.
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