Silver rose over 6% in a single day, while copper prices reached a new high. The CME's "system crash" caused significant volatility in the precious metals market
The CME malfunction caused fluctuations in the precious metals market, with silver futures rising over 6% in a single day and copper prices hitting a new high. The malfunction was due to a cooling issue at the data center, which temporarily halted trading before resuming. Silver prices are influenced by multiple factors, including the COMEX malfunction, market expectations for interest rate cuts, ETF fund inflows, and supply tightness. Analysts expect silver prices to continue rising, while copper prices surged due to supply shortages and bullish forecasts
Earlier, the commodity exchange under the Chicago Mercantile Exchange Group experienced a continuous outage for several hours, leading to significant fluctuations in precious metal prices, with silver and copper both reaching new highs. Silver futures surged over 6% in a single day, peaking at $57.25 per ounce, breaking the high set in October. The settlement price for copper futures on the London Metal Exchange (LME) rose by 2.3%. Additionally, spot gold also increased by nearly 2%, reaching $4,239.44 per ounce; New York futures rose by 1.2% to $4,254.9.
"Cooling Issue" Causes Trading Suspension
The Chicago Mercantile Exchange confirmed around 6 PM Hong Kong time on Friday that all market trading was suspended due to a "cooling issue" at the CyrusOne data center. By around 9:40 PM the same day, it was confirmed that all markets had fully resumed trading.
The recent surge in banking stocks was driven by multiple factors, including the hours-long outage at the New York Mercantile Exchange (COMEX) under the Chicago Mercantile Exchange, the quiet trading volume due to "Black Friday" in the U.S., rising expectations for a Federal Reserve rate cut in December, capital inflows into physical assets supporting ETFs, and ongoing supply tightness, all of which pushed up silver prices. Copper prices also surged amid supply shortages and bullish forecasts.
Silver reached a new high just over a month after severe supply tightness was reported at the main trading center in London, where silver prices soared above those in Shanghai and New York. Although nearly 54 million ounces of silver arriving in London alleviated some of the tightness, the market remains noticeably tight.
Analysts Expect Further Increases in Silver Prices
The influx of silver into the London market has begun to exert pressure on other trading centers, including China. According to exchange data, silver inventories in warehouses associated with the Shanghai Futures Exchange recently fell to their lowest level since 2015. Analysts at Deutsche Bank noted in an earlier report on Friday: "In the short term, if China's registered silver inventories continue to decline, the possibility of further price increases cannot be ruled out."
As for copper prices, prior to this increase, mining companies, smelters, and traders held a meeting in Shanghai this week, focusing on the tightening market issue. Kostas Bintas, head of metals at Mercuria Energy Group Ltd., reiterated his bullish forecast, warning that the rush to ship metals to the U.S. could deplete inventories in other regions
