Usually every Friday, the Commitment of Traders (COT) report for precious metals including gold and silver is released to the public that accounts for position data ending on the previous Tuesday. Although specific traders aren't named, the report is considered key in understanding the structure of the market. For this reason, some traders in the silver market expect increased volatility and large market declines on Tuesdays and Wednesdays - and the data supports this notion.
Using year-to-date data of the Silver ETF (SLV), we found that indeed Tuesday is the most volatile trading day for silver with a price range of $0.45. While there was downward bias, it's worth noting that this volatility went in both directions. With silver up 75% year to date, every day of the week had a positive average return for 2010. While there were some take-down Tuesdays, there were take-up Tuesdays as well. The majority of these price movements are seen in seconds or minutes - many times with daily downward or upward gaps.
In measuring daily changes from the previous close, Tuesday also had the most volatility - with an average price change either upwards or downwards of $0.31.
Interestingly, Mondays had the largest average gains with an average gain of nearly $0.12. Tuesday and Wednesday had the lowest returns of $0.03 and $0.01 respectively.
The average week for the silver price had a spike higher on Monday, followed by a correction starting on Tuesday and ending Wednesday with a renewed uptrend into the weekend. On average, the best day to buy silver was Wednesday - especially if after a Tuesday takedown. The best day to sell silver was late Monday. Interestingly this pattern strongly corresponds to the COT report release cycle.
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