London — Silver, known for being a market of extremes, is living up to its reputation in 2017. Prices rallied 17% in the first four months, only to reverse and wipe out those gains. Despite the sell-off, investors are pouring money into exchange-traded funds (ETFs) and assets have reached a record 21,211 tonnes, valuing the holdings at $11bn. The picture is bearish in the futures market, where hedge funds now hold the first net short position in two years. Different sorts of investors are driving the opposing trends, said George Coles, an analyst at research firm Metals Focus. Large, active hedge funds shorted Comex futures due to the risk of higher US interest rates, driving silver prices lower, he said. ETF buyers tended to be smaller traders who used silver for long-term diversification of their portfolios. They would be rewarded for their bullishness as slower US economic growth spurred demand for haven assets, Coles said. He predicted that silver prices had probably bottomed an...
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