CME December futures in Gold, Silver, and Copper will come to an end this month. The price difference between spot silver and CME silver December futures is around $0.33. Silver price will not fall or crash unless this price gap narrows. The concept of price decay is not happening to silver. There is huge arbitrage money in silver and copper. Silver and copper are an out-and-out arbitrage play for global hedge fund managers. Hedge funds have made historical profits in arbitrage between silver and copper this year.
In 2026, the arbitrage in silver and copper will not be there. Physical demand and investment demand for silver and copper (in 2026) will see a slower pace of rise. Historical high and rising hedge fund arbitrage activity will reduce. Incremental return will be less in 2026 (in gold, silver, and copper). At the most, the bullish trend will be there for four months till the end of February. Thereafter, the pace of rise will slow down.
Savings in Asia will reduce as the cost of living is seeing a steep rise in India and in most countries in Asia. Investment demand in Asia in 2026 (for gold and silver) will be less overhyped than now. Asian stock markets (except Japan) should be bullish in 2026 as nations nullify the impact of the Trump-induced trade war. Asian retail investors will switch to equities more than safe havens.
Most of us have overlooked the yen (USD/JPY) currency carry trade impact on precious metals and non-ferrous metals. Traders’ expectation is that the USD/JPY will rise to 160.00 in the short term, and there is a chance of 170.00 before the end of the first quarter of 2026. In my experience, a weaker USD/JPY is always bullish for gold, silver, and copper due to a carry trade opportunity. USD/JPY needs to trade below 140.00 for any medium-term bearish trend in precious metals and copper. The Bank of Japan is happy with a weaker yen. They will not do anything that results in a stronger yen in the next six months.
Hyper bullish sentiment is there in gold and silver. I will be cautious. It is not the rise. It is the overhype and pace of rise that worries me more than the actual rise. A crash or sell-off will be there when we least expect it. The real test for the current bullish trend will be between Thanksgiving and Christmas.
SPOT SILVER – current price $48.81
- Spot silver has to trade over $47.70 on a daily closing basis this week to rise to $53.20 and more.
- A daily close below $47.70 for three consecutive trading sessions is needed for a big crash.
- There can be some very sharp two-way price moves.
- Views are intraday unless otherwise specified.
Disclaimer
The investment ideas provided is purely independent view point and are solely for collective learning and for academic interests. There is no commercial benefit accruing or have deemed to accrue to me out of providing such investment ideas.
The investment ideas shared here cannot be construed as investment advice or so. If any reader is acting on these advices, they are requested to apply their prudence and consult their financial advisor before acting on any of the recommendations made here. I am not responsible to anybody in the event of profits and losses (if any) upon acting on such advice.
I hope that our reader is aware about this well aware of the risk involved in trading in commodity derivative trading.
Disclosure: I trade in India's MCX commodity exchange. I have open positions in India's MCX commodity future. I do not trade in CME future or OTC spot gold and spot silver.
NOTES TO THE ABOVE REPORT
- ALL VIEWS ARE INTRADAY UNLESS OTHERWISE SPECIFIED
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- PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
- PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
- THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
- ALL PRICES/QUOTES IN THIS REPORT ARE IN US DOLLAR UNLESS OTHERWISE SPECIFED.
- ALL NEWS IS TAKEN FROM REUTERS NEWSWIRES.
- TECHNICAL ANALYSIS IS DONE FROM TRADINGVIEW SOFTWARE
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