It’s risk off in Asia.
Government bond yields are hitting fresh record lows, stocks are slumping – continuing to unwind last week’s enormous post-Brexit gains – while the US dollar, Japanese yen and Swiss franc remain in high demand, much to the detriment of their higher-yielding compatriots such as the Australian dollar.
Safe havens are in demand, as concerns about the outlook for the global economy intensify, again.
Precious metals, as a well-known safe haven in times of market turmoil, are also benefiting, with gold and silver screeching higher in early Asian trade.
Gold is currently fetching US$1366.86 an ounce, up 0.82% for the session. It currently trades at the highest level since March 2014.
Silver is doing even better, jumping 1.72% to $20.255 an ounce, near the highs struck last week.
While both are benefiting from safe haven flows, silver is perhaps being boosted by Chinese speculators who are increasingly dabbling in the market, according to Saxo Bank.
Saxo says the pick up in trading volumes on the Shanghai Futures Exchange over the past week and the decline in open interest suggest Chinese retail investors have “taken over silver for now”, according to the Financial Times.
“As long this continues, we are likely to see bigger daily price swings with the Asian session seeing most of this,” says Saxo.
After stocks and bulk commodities, it seems Chinese traders may have found their latest fix.
Here’s a daily chart, supplied by Thomson Reuters, that looks at the performance of spot gold and silver over the past three years.
You can read more on silver here.