In an otherwise fairly quiet week, some wild gyrations in the silver market were the focus of investor attention. Starting late last week, the price of silver surged by 20% to reach a multi-year high on Monday. Reportedly, the retail investors that had been pushing up the prices of a few US small caps had turned their attention to silver. However, there was not a large net-short position to target in the silver futures market and its much larger market size meant that the rally soon fizzled out.
Next week heralds the start of the Chinese New Year holiday, which is likely to usher in a relatively quiet period for commodities prices. However, with workers being encouraged not to travel for the holiday, it is likely that the demand and supply of commodities in China will be significantly higher in February than is usual at this time of the year.
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