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Silver reaches a new record, riding on the coattails of gold

Silver prices reached a new record on Wednesday. This was boosted by the bullish gold market and investor demand for hard assets in an environment of persistent geopolitical, economic and political risks as well as expectation of U.S. rate cuts.

Silver spot reached a new high of $49.57 an ounce. Silver, a precious metal and an industrial metal, has seen a 70% increase in value this year. It is on track to have its best annual growth since 2010.

On Wednesday, gold, which is traditionally considered a safe haven during periods of uncertainty, surpassed the $4,000 per ounce mark for the first-time, while the price of copper briefly reached a 16 month high.

Zain Vawda is an analyst at MarketPulse, by OANDA. He said that there are also cases where retail traders have used silver as a "safe-haven" bet, which has increased the demand and supported a rally in price.

Silver could reach $55/oz in the next few months, given the structural deficit and the strong industrial tailwinds.

After this year's massive inflows into the COMEX owned warehouses in the U.S., tight liquidity on the London spot market is providing another layer of support for silver. .

The first reason for these deliveries was to avoid the U.S. import tariffs in April, which silver avoided.

This concern led to unusually large differences between London spot prices and New York CME futures, the exchange for Physical or EFP markets. The New York premium made it profitable for gold and silver to be moved to New York," HSBC's James Steel wrote in a note.

Silver's inclusion in a draft list for critical minerals in the United States has sparked speculation about potential tariffs. COMEX stocks reached a record last week.

According to the LBMA, at the end of September there were 24,581 metric tonnes of silver in London vaults. This is down 0.3% compared to August and valued at $36.5 Billion.

It takes 82 ounces to purchase an ounce gold Silver has caught up to the price of gold, compared to 105 in April.

Matthew Piggott is the director of metals at Metals Focus. He said that silver underperformed gold in mid-year, as the ratio gold-silver went up to 100. Trade concerns reflected silver's industrial role.

Silver will continue to rise and surpass $60 in 2026.

Prices are supported by macroeconomic and financial factors, but also by the strong demand for technologies like photovoltaics and electronic devices.

Morgan Stanley noted that, similar to gold, silver also saw a rise in the inflows into physically-backed exchange-traded silver funds (ETFs). It also enjoyed a strong industrial demand due to increased solar installations in China between January and May.

Silver ETFs have room to grow, but they could begin to lag behind gold, as solar demand is expected to slow.

(source: Reuters)