Silver Just Had Its Best Month In 40 Years: Here Are July’s Best And Worst Performing Assets

by Tyler DurdenMon, 08/03/2020 – 13:22

When looking at the torrid market performance in July, Deutsche Bank’s Jim Reid notes that silver (+35%) had its best month since December 1979 while the dollar the worst for a decade. US equities had a good month in spite of rising virus caseloads due to a strong earnings season relative to expectations, especially in tech towards the end of the month. YTD Silver, Gold and the NASDAQ have been the three best performers while at the bottom of the leaderboard Brent, WTI and European Banks are all down at least 30%.

Below we present some of the key highlights from Deutsche Bank’s July 2020 performance review

While July proved to be another decent month for risk assets, it was the performance of two other assets in particular which caught the eye. The first was Silver, which had its strongest month since December 1979. The second was the weakness in the USD, which ended with the USD spot index dropping by the most in a single month since September 2010.

Indeed the impact of the latter was fully felt when looking at returns in USD terms, with 36 of the 38 assets in DB’s sample finishing with a positive total return. In local currency terms, that number dropped to a still-impressive 30 assets. As markets move into August, typically a more subdued month for volumes but perceived to be a weaker month for risk, the focus remains on the reopening of economies on the one hand and signs of rising cases in certain countries on the other.

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Silver to surge above $35 after taking a breather – Credit Suisse

Silver has established its looked for base and has already moved to the first resistance at $26.09/22. Whilst strategists at Credit Suisse look for a pause here, they see scope for further gains ahead, ideally to $35.23/365. 

Key quotes

“Silver has seen an even more dramatic move higher than Gold over the past few weeks, confirming the flagged multi-year base above $19.65, and strength has already extended to our flagged resistance at $26.09/22 – the 38.2% retracement of the entire 2011/2020 bear market and key lows from 2011 and 2012.”

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Silver Nears 7 Year High, Closing in on US$30

Silver edged above US$26 per ounce on Monday (July 27), adding more that 31 percent to its value since January.

Safe haven demand and record exchange trade fund (ETFs) inflows have been the primary catalysts for the metal’s sustained growth in Q2. Reinvigorated animosity between the US and China, and concern a second wave of COVID-19 will further weaken the global economy have been key drivers recently.

The white metal is now back in territory unseen since September 2013, with motivators in place to move it higher.

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