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Spot silver reaches US$30 an ounce and reaches the highest value since 2013
(Bloomberg) — Spot silver surpassed $30 an ounce and hit its highest level in more than a decade, in a rally that has become stronger and faster than gold’s gains amid robust financial demand and industrial.
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The precious metal rose 4.2% to $30.81 per ounce, the highest intraday level since February 2013. Silver is up 29% this year, overtaking gold and making it one of the world’s best-performing major commodities. year.
Silver rallied due to growing investor interest, with an increasingly favorable macroeconomic backdrop, as well as a fourth annual market deficit forecast. The price recovery accelerated on Friday, helped by rebounding sentiment in broad metals markets and mania in so-called meme stocks.
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“This week has been kind of a recreation of the meme stock,” Phil Streible, chief market strategist at Blue Line Futures, said Friday in a phone interview. These speculators naturally look for different areas to explore. And silver is usually what they prefer.”
Silver was a target market for Reddit retail traders in 2021 amid a buying stampede in GameStop Corp. and other small-cap stocks that have captivated the financial world.
A breakout of the precious metal’s $30 level could trigger substantial exchange-traded fund buying activity that could increase the risks of a silver squeeze, especially with the renewed “meme stock” craze that has infiltrated the markets. silver markets last time, according to TD Securities Senior Commodity Strategist Daniel Ghali.
Investors continue to be net sellers of physically-backed silver ETFs so far this year, with holdings falling 1.7% on Thursday, according to data compiled by Bloomberg. Money managers remained bullish on Comex silver futures, with gross short positions held by them representing 12.5% of total open interest as of May 7, according to CFTC data.
Silver has soared by more than a quarter this year, overtaking gold and making it one of the year’s best-performing major commodities. Still, in relative terms to gold, silver is still cheap.
The two precious metals largely move in tandem, as they both offer similar macro and currency hedging properties. With gold hitting record central bank purchases, retail interest in China and a resurgence in bets that lower interest rates in the US are on the way, silver has been along for the ride. While there has been little investor interest in silver-backed exchange-traded funds, physical sales have increased, including at Singapore-based brokerage Silver Bullion Pte.
The story continues
Silver has a dual character, valued both for its use as a financial asset and as an industrial input, including clean energy technologies. The metal is a key ingredient in solar panels, and with this industry’s robust growth, metal use is expected to reach a record high this year, according to the Silver Institute. In this context, the market is heading towards a fourth year of deficit, with this year’s shortage considered the second largest ever recorded.
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