Silver New Record Near $42/oz -- Speculative Sentiment Remains Tame

Continuing talk of speculative fever or frenzy is hyperbole. Bullion dealers internationally are busy. However, it is important to note that buying has not increased massively and is around levels seen after the collapse of Bear Stearns and Lehman Brothers and at the higher of the first phase of the sovereign debt crisis. Some dealers have been talking up sales in an effort to raise profile.

Proof of the lack of animal spirits in the silver marker is seen in the data which shows that speculative sentiment on the COMEX (as seen in the Commitment of Traders/ COT data -- see chart below) is subdued. While the total silver ETF holdings increased to a record, they are not far above the levels seen in December 2010 (see chart above).

Importantly, even at $41.30/oz the dollar value of the total silver ETF holdings remains very small at just over $20.5 billion.