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Despite record-breaking global silver prices, analysts warn that rising silver inventories and manageable delivery risks suggest caution for investors considering buying at high prices. Yesterday, the spot silver price in London closed at $57.862 per ounce, marking a historic high. Meanwhile, the most actively traded silver futures contract in China, AG2602, surged over 5%, reaching 13,787 yuan (approximately $1,948) per kilogram.
The significant spike in silver prices is primarily driven by supply and demand dynamics, according to Liu Yuxuan, a precious metals researcher. Silver prices started climbing in late September due to tightening in the London spot market, and recently hit a peak amid strong investment enthusiasm.
Currently, domestic silver futures inventories are at historic lows, with 573 tons on the Shanghai Stock Exchange and 715 tons on the Shanghai Gold Exchange, totaling just 1,288 tons. However, inventories are increasing, and delivery risks are becoming more controllable. An analyst noted that inventory on the Shanghai Futures Exchange grew by 40 tons last week, with an additional 14 tons added yesterday alone.
Liu pointed out that the exchange’s silver inventories have been on the rise lately. Despite this, he emphasized that current trading risks are manageable given the circumstances. He advised investors to remain cautious, especially when prices are high and volatile, encouraging risk management strategies.
Both institutional and individual investors need to carefully assess factors such as their financial situation, investment goals, and risk tolerance. Controlling positions and avoiding impulsive, unplanned investments are essential to navigating this market effectively.
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