NEWS YORK (Scrap Register): Citi Research is not looking for silver to regain its highs from August any time soon.
Spot silver broke below $18 an ounce on October 4 for the first time in three months, following the initial European Central Bank announcement to potentially taper the bond-buying program, Citi added.
“The same day saw the gold:silver ratio jump to 71x (times) -- from a 2H’16 average of 68x -- during intra-day trading as silver price returns fell below 30% YTD (year to date) for the first time since June,” said analysts at Citi.
“Given RSI (Relative Strength Index) levels suggest both gold and silver prices are now oversold, the recent buying trend from Chinese investors immediately post the ‘Golden Week’ holiday and the pending U.S. presidential elections may help to counter any further MTD (month-to-date) price unwind,” they added.
However, Citi continued, “we are unlikely to surpass” the August peak, “assuming clarity on BOJ (Bank of Japan) and ECB tightening schedules and the U.S. Fed hikes rates in December.In terms of fundamentals, mine supply appears robust and Asian retail demand has been weak thus far, providing little price support.”