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Silver surpassed $50 an ounce for the first time on Thursday, amid a supply shortage and an economic environment boosting precious metals.
Spot silver briefly rose above $51 per ounce during Thursday’s trading session after crossing the $50 per ounce threshold earlier in the day. It has since fallen back below $49 per share where it opened on Thursday. The last time silver traded around these levels was January 1980.
Spot gold prices fell 2% on Thursday after crossing $4,000 for the first time on Wednesday.
Precious metals investors posted gains in both silver and gold as safe haven prices fell in the wake of a ceasefire agreement announced in the war between Israel and Hamas in Gaza.
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Silver prices have soared this year due to a supply shortage and economic conditions that have favored precious metals. (Clark Hodgin/Bloomberg via Getty Images/Getty Images)
“Speculators take some gold chips off the table A ceasefire in Gaza It is effective because it lowers temperatures in a historically volatile region,” Tai Wong, an independent metals trader, said in a Reuters report.
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“Gold and silver may need to consolidate further, but the key drivers of the rally, reserve diversification and large, growing global sovereign debt, remain fully valid and keep the bullish outlook intact,” Wong added.
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The silver price reached the $50 per ounce mark for the first time on Thursday. (Michael Nagle/Bloomberg via Getty Images/Getty Images)
Gold’s rally this year has been driven by geopolitical tensions, but also by robust demand from central banks, rising inflows into exchange traded funds (ETFs)expectations of interest rate cuts and economic uncertainty due to rate changes and shifts in trade policy.
The SPDR Gold ETF Trust, the largest backed by physical gold, is up nearly 50% this year. While smaller mining ETFs, including MicroSectors Gold Miners 3X Leveraged ETNs, are up more than 740% this year as the best performing ETF, as tracked by VettaFi.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GLD | SPDR GOLD SHARES TRUST – USD ACC | 365.44 | -6.90 |
-1.85% |
| GDXU | BANK OF MONTREAL MICRO SECTORS GOLD MINERS 3X | 198.96 | -29.58 |
-12.94% |
Silver’s 69% increase this year has been driven by similar factors, as well as a shortage of supply in the silver spot market.
ETFs linked to gold’s cousin are also big winners this year, with the iShares MSCI Global Silver Miners ETF up over 148% and ProShares Ultra Silver up over 148%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AGQ | PROSHARES ULTRA SILVER – USD DIS | 78.81 | -3.29 |
-4.01% |
| SLVP | ISHARES INC MSCI GLOBAL SILVER MINR ETF | 27.67 | -0.95 |
-3.34% |
A precious metals trader noted to Reuters that liquidity in the London silver market is limited due to ETF buying and metal movement to the US.
FED minutes show policymakers remain concerned about inflation as they consider rate cuts
Precious metals such as gold have risen this year amid economic uncertainty. (Chris Ratcliffe/Bloomberg via Getty Images/Getty Images)
The markets expect the Federal Reserve to continue cutting rates after the central bank cut rates by 25 basis points last month, the first rate cut this year.
Traders are pricing in a 25 basis point cut at the Fed’s upcoming policy meetings in late October and mid-December.
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The expectation of additional Fed rate cuts this year comes despite signs that inflation is trending upward and moving further away from the central bank’s 2% target, as concerns about a weakening labor market outweigh policymakers’ inflation concerns.
Reuters contributed to this report.
