While a few false dawns have emerged in the past, spot and futures prices are both finally breaking out of the wedge that has contained Silver markets from the 2024's local top not reached since 2012, TDS' Senior Commodity Strategist Daniel Ghali notes.
"The breakout in futures markets is relevant as it is likely to catalyze CTA buying activity which directly attracts new directional inflows, which may become self-reinforcing. The break north of $31.55/oz in SIH5 will only force CTAs to buy +4% of their max size, but CTAs will continue to buy Silver in (nearly) every scenario for prices over the coming sessions, barring a sharp reversal (akin with a big downtape)."
A confirmed break from the wedge may also attract further discretionary trader interest, particularly with Gold prices pushing towards all-time highs, given evidence that while this cohort may be involved in the EFP dislocation, they remain directionally flat.