The Silver price rose from $50 to more than $54 per troy ounce since the beginning of the week. The rise in the price of Silver thus eclipsed that of Gold. The Gold/Silver ratio subsequently fell to an annual low of just over 77, Commerzbank's commodity analyst Carsten Fritsch notes.

Shanghai Silver inventories drop to 10-year low

"The Silver price is being buoyed by expectations of an interest rate cut by the US Federal Reserve in the week after next. In addition, Silver inventories registered on the Shanghai Futures Exchange have fallen to their lowest level in 10 years, and those on the Shanghai Gold Exchange to their lowest level in more than nine years, according to Bloomberg, citing data from exchanges and brokers."

"This was triggered by China's record exports of 660 tons in October. These apparently went to London, where shortages had occurred in October. If deliveries were to return to China in the near future, supply outside China would become correspondingly tighter. The Silver ETFs tracked by Bloomberg recorded inflows of a good 290 tons in recent days, which withdrew supply from the market and is also likely to have contributed to the price increase."

"Since the beginning of the year, ETF inflows have totaled more than 3,500 tons, with most of this occurring in the first nine months of the year. ETF demand has thus also been a significant price driver for Silver this year."