- Spectrum's European retail investor sentiment indicator shows bullish behaviour on gold and silver
- Sentiment suggests retail investors saw a buying opportunity as gold prices dipped in May
- Retail investor sentiment has remained bullish on silver since its introduction on Spectrum in December 2023
Spectrum Markets (“Spectrum”), the pan-European trading venue designed for retail investors, has published its SERIX® sentiment data for European retail investors for May, revealing bullish trading behaviour for both available precious metal underlyings, gold and silver.
Gold prices fluctuated in May, peaking at $2,449 per ounce by 20th May before dropping to $2,325 towards the end of the month1. This dip created a buying opportunity for investors and was likely a key driver of the bullish SERIX® sentiment of 104.
Silver also reached a record high of $32.391 per ounce by the end of May2. However, retail investors remained bullish, with the SERIX® for silver closing at 108 points for the month. Since Spectrum introduced products with silver as an underlying asset to trade in December 2023 in response to investor demand, sentiment towards the precious metal has been consistently bullish, starting with a peak SERIX® value of 125 points.
The SERIX® value indicates retail investor sentiment, with a number above 100 marking bullish sentiment, and a number below 100 indicating bearish sentiment. (See below for more information on the methodology).
Market opinion
“Despite the SERIX® sentiment on gold indicating tactical buying behaviour from retail investors, the SERIX® on silver tells a different story, aligning with its high market price,” says Michael Hall, Head of Distribution at Spectrum Markets.
“While the performance of gold is strongly connected with currencies and interest rates, the SERIX® sentiment indicator suggests European retail investors track the silver market based on rising demand patterns. This increasing demand is driven in part by the search for alternative energy solutions, as silver is essential in photovoltaic panels, which convert sunlight into electricity,” adds Michael Hall.
Spectrum’s May data
In May 2024, order book turnover on Spectrum was €246.7 million, with 36% of trades taking place outside of traditional hours (i.e., between 17:30 and 9:00 CET).
70.5% of the order book turnover was on indices, 16.8% on commodities, 5.4% on equities, 3.6% on currency pairs, and 3.7% on cryptocurrencies, with the top three traded underlying markets being DAX 40 (25.1%), NASDAQ 100 (24.9%), and DOW 30 (9%).
Looking at the SERIX® data for the top three underlying markets, the DAX 40 sentiment decreased from 101 to a bearish 98. Similarly, the NASDAQ 100 dropped from 101 to 99 and the DOW 30 fell from 103 to 99 this month.
Calculating SERIX® data
The Spectrum European Retail Investor Index (SERIX®), uses the trading venue’s pan-European trading data to shed light on investor sentiment towards current development in financial markets.
The index is calculated on a monthly basis by analysing retail investor trades placed and subtracting the proportion of bearish trades from the proportion of bullish trades, to give a single figure (rebased at 100) that indicates the strength and direction of sentiment:
SERIX® = (% bullish trades - % bearish trades) + 100
Trades where long instruments are bought and trades where short instruments are sold are both considered bullish trades, while trades where long instruments are sold and trades where short instruments are bought are considered bearish trades. Trades that are matched by retail clients are disregarded. (For a detailed methodology and examples, please visit this link).
About Spectrum Markets
Spectrum Markets is a pan-European trading venue for financial instruments aimed at financial institutions and their retail investors. Headquartered in Frankfurt am Main, Germany, and with presence across Europe, Spectrum Markets was designed for transparency, integration and openness while enabling unparalleled access to the markets beyond traditional trading hours with 24/5 on-venue trading for the first time in Europe.
Since launch in August 2019, financial instruments listed on Spectrum Markets have been made available for retail trading in Germany, Italy, France, Spain, Sweden, Norway, the Netherlands, Ireland and Finland.
Acting as a MiFID II regulated trading venue authorised and supervised by BaFin, Spectrum Markets uses a uniquely open architecture, allowing intermediaries and product providers to offer to retail investors a unique trading experience with increased choice, control and stability.
Being an MTF (Multilateral Trading Facility), Spectrum Markets provides access to innovative products designed to give European retail traders flexibility and control over their trades. This includes Turbo24, the world’s first 24-hour turbo warrant.
Through the pan-European ISIN, 24/5 trading services, intraday issuance and a fully proprietary venue, Spectrum Markets enables a guaranteed baseline level of liquidity over a range of products, is able to swiftly and safely match a significant number of orders, and to process messages with a low latency.
Spectrum Markets publishes SERIX® – the Spectrum European Retail Investor Index – a pan-European client sentiment that informs as to whether retail investors have taken exposure on a bullish or bearish view on a specific underlying. SERIX® is a measure based on trades made by retail investors across Europe which can be used to compare how sentiment has changed (in terms of directionality or strength of sentiment) over time on a monthly basis.
Spectrum Markets is a wholly owned subsidiary of IG Group (LSEG: IGG).
Further information can be found at spectrum-markets.com
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Disclaimer
All information contained herein is for information purposes only and addresses exclusively Members of Spectrum Markets and persons interested in becoming a Member of Spectrum Markets. Nothing herein constitutes an offer to sell or a solicitation of an offer to purchase any financial instrument(s) listed on Spectrum Markets or any product described herein. Spectrum Markets does not provide financial services, such as investment advice or investment brokerage. Prospective retail investors can trade such products only with their brokers. The information herein does not constitute investment advice or an investment recommendation. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.
1Source: tradingview.com
2Source: tradingview.com
