London - Investors are buying silver through funds at the fastest pace in more than two years even as prices drop to the lowest in almost a month.
Holdings in silver-backed exchange-traded products jumped 845.6 metric tons in March, heading for the biggest monthly increase since August 2013. Known as the devil’s metal because of its often wild swings, prices are down for a fourth time in five days. Money managers boosted bullish bets to a record in the week ended March 22, the latest US government data show.
“Flows into ETFs remain strong, which could indicate that longer-term investors are not being put off by the recent retracement,” Ole Hansen, head of commodity strategy at Copenhagen-based Saxo Bank A/S, said by e-mail. Prices are “currently exposed to profit taking after a big build up in speculative longs during the past few weeks.”
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Traders are waiting for more clues about the timing of US interest rates increases. While San Francisco Federal Reserve President John Williams said on Monday the economy is vulnerable to global developments, other policy makers have recently signaled that borrowing costs may rise as soon as April.
Silver for immediate delivery fell 0.8 percent to $15.1175 an ounce by 11:17 a.m. in London, according to Bloomberg generic pricing. It dipped below the 50-day moving average for the first time since January and is down 6.4 percent since reaching a four-month high on March 18.
ETP holdings
Holdings in ETPs rose to 19 486 tons as of Monday, the highest since April, data compiled by Bloomberg show. Hedge funds and other speculators boosted their net-long position in US contracts by 6.6 percent in the latest week to the highest since at least 2006, Commodity Futures Trading Commission data show.
Gold declined 0.3 percent to $1,218.55 an ounce in London, after touching a one-month low on Monday. Fed Chair Janet Yellen’s speech on Tuesday may give more indications on the outlook for prices, Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group in Sydney, said by phone.
Platinum rose 0.4 percent to $949.31 an ounce. Palladium added 0.2 percent to $569.60 an ounce.
BLOOMBERG