As of next Thursday, trading in silver futures will become possible on the Shanghai Futures Exchange. The exchange will form an alternative platform to the American Comex, a market which many believe is subject to substantial manipulation.
China has a rich silver history, and its currency was linked to a silver standard until the 1930s. After Peru and Mexico, China is the world’s largest silver producer, and according to insiders the largest user of silver as an industrial metal. Within China, demand growth for silver has been into double digits for a while. China’s recent focus on gold is seen by many as one of the driving forces behind gold’s five-fold price increase over the last decade. Some see the possibility of a similar effect on silver, given that the silver market is substantially smaller than that of gold.