Silver Bounces Back Over $20 After China Day-Traders Trounced

The last 48 hours in precious metals markets – more specifically silver – has been chaotic to say the least with a massive spike Sunday night above $21 and a sudden flash crash overnight to $19.50 before rallying back above $20 this morning. Silver’s recent rise mirrors a similar surge in steel rebar and iron ore futures in April
But as Saxo’s Ole Hanson warns, the biggest two-day surge in silver since 2011 has raised a few questions about the sustainability of the current rally and what is driving it.
Macro economic developments which have been highlighted on several occasions during the past few months continue to attract demand for precious metals from retail, real money and hedge funds.
Speculative positions held by hedge funds in both gold and silver have reached record levels while demand for exchange-traded products especially those in gold have continued to rise on an almost daily basis.

This post was published at Zero Hedge on Jul 5, 2016.