Commodity Online
Barclays in a report has said it continues to believe silver retains the weakest supply and demand dynamics: despite the strong start to investment demand this year, prices have struggled to gain traction, in turn exposing the weak industrial consumption that investor interest needs to compensate.

"Prices south of $30/oz should start to appeal to industrial consumers, limiting additional downside from $28/oz, but given the wide surplus we forecast this year, we expect silver prices to remain volatile." the bank said. 

Meanwhile, the broad macro backdrop remains supportive for gold. Market focus will turn to the upcoming non- farm payrolls data and the debt ceiling vote thereafter; should gold fail to respond, however, ETP outflows will become the key downside risk , usurping physical demand.

In gold, longer-term investor interest has also shown increasing signs of waning. Net redemptions have accelerated in February, with net outflows reaching 38 tonnes. SPDR, the largest gold ETP, suffered net redemptions of 21 tonnes in a single session, the weakest daily session since August 2011.

Metal held in trust across all products that Barclays tracks has eased only modestly to 2724 tonnes, 41 tonnes off the peak. When prices were last at these levels in July 2012, metal held in trust was much lower at 2550 tonnes, suggesting almost 200 tonnes of exposure could be at risk depending on when metal was accumulated.

It is worth noting that the last time prices fell by this magnitude, metal held in trust was broadly stable, whereas redemptions have materialised this time.

Thus, ETP holdings will remain essential for gold prices.

The entire bullion complex has endured downward pressure over the past week, with gold and silver prices bearing the bulk of the losses. Silver prices lost 7% over five trading sessions to close at levels last seen six months ago.