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لا تقدم سنشري للاستشارات والتحليل المالي ش.ذ.م.م (سنشري) خدمات استشارية استثمارية أو خدمات إدارة المحافظ ولا تضمن العوائد الاستثمارية. كما أننا لا نقبل ولا ندفع بعملة مشفرة أو عملة رقمية. موقعنا الإلكتروني الرسمي هو www.century.ae. احذر من الشركات المحتالة أو المواقع الإلكترونية التي تتظاهر بأنها شركة سنشري. لسنا مسؤولين عن أي خسائر تنجم عن استخدام مواقع إلكترونية أو كيانات مزيفة. ينطوي التداول في الأسواق المالية على مخاطر خسارة كبيرة قد تفوق الودائع وربما لا يناسب جميع المستثمرين. قبل أن تبدأ، يُرجى التأكد من فهمك التام للمخاطر ذات الصلة.

Tuesday, October 13, 2020

Silver Seasonality Analysis

تم إعداد هذا المنشور من قبل سنشري للاستشارات

Silver Seasonality Analysis
Markets in October over the last 10 election years

*This performance is only observed with historical backtests and not traded by the company.

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November month pointing towards further discount for Silver?

Risks & Assumptions
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The flyer attempts to analyze seasonality for Silver metal during month of November with various associated reasons.
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The flyer does not constitute a Buy | Hold | Sell advice on silver or any other precious metals.
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Owing to US Presidential Elections scheduled to take place early next month, perfomance of commodities including silver could largely deviate from their historical trend.

Chart - Silver 6 year Seasonality Analysis (Source: Bloomberg)

The above chart show last 6 year Silver seasonality analysis heat map. As seen from the above, November tends to be the weakest for the commodity while January is the strongest. Over the last 6 years, Silver has declined each year in November month with average losses seen during this month being -4.72 %. For January month, the inverse is true as Silver has gained in 5 out of 6 years with average gains of +4.79 %.

Macro reasons for November Downfall

1) Silver being second only to oil in terms of industrial application is largely impacted by industrial /manufacturing cycle flow. As a consequence, yearend deleveraging by major industries in form of reduced silver inventories & demand likely affects the metal prices. As an instance for 2019, global silver demand was in range of 991.8 million ounces. Industrial fabrication accounted for 510.9 million ounces (52 % of total demand).

2) Precious jewelry sector accounted for 201.3 million ounces worth of demand in 2019(20 % of total demand). Countries like India & China constitute bulk of silver demand from this sector side. Asian harvesting & wedding season are the 2 primary factors that drive this demand. In such countries, silver owing to its allure & lower value is often seen as small brother substitute to gold.

Pre November Pent Up Demand

In India for example, the Asian harvest season that typically starts from late summer sees a lot of demand from poor to middle income farmers till start of the winter. This is primarily in anticipation of buying before the wedding season with expectations of huge price increase as wedding season progresses. Month of October, November & December also correspond to majority of Indian festivals being celebrated along with Indian wedding season in full swing.

*Past performance is not indicative of and does not guarantee future results. Trading in markets may involve loss of capital.

Data Source: Bloomberg

Arun Leslie John
Chief Market Analyst

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