Silver is tightening again – TDS

The market remains fearful of another silversqueeze event down the corner, TDS' Senior Commodity Strategist Daniel Ghali notes.

ETF holders' trading behavior is likely in flux

"We're not worried. The market is now in a better balance, as the silversqueeze you can buy into resulted extreme dislocations which have now become self-resolving. A silverflood is still making its way in what will likely be the single largest repletion of London's free-floating Silver inventories on record."

"Between Shanghai, Comex and ETF outflows, LBMA free-floating inventories have increased by at least 50mn oz since the most epic squeeze in half a century devastated Silver's market structure. Most importantly, with prices failing to recapture the $50/oz level, ETF holders' trading behavior is likely in flux."

"Following a failed breakout, lower prices will beget liquidations, which in turn will replete the free-float further in a self-reinforcing cycle that should remain fundamentally bearish for some time. What's more: Being a little B.A.D. (Bet Against Debasement) doesn't hurt in Silver — the white metal has historically significantly underperformed as a debasement hedge. There was a time to be fearful for a silversqueeze. This isn't it."