Silver exceeds $50 an ounce for the first time amid geopolitical and economic uncertainty
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Silver rose above $50 an ounce for the first time on Thursday amid tight supplies and an economic environment supportive of precious metals.
Spotted Silver briefly topped $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 when it opened Thursday. The last time silver traded around these levels was January 1980.
Spot gold prices fell 2% on Thursday after breaching the $4,000 mark for the first time on Wednesday.
Precious metals investors booked profits in both silver and gold after safe-haven asset prices fell following a ceasefire agreement announced in the war between Israel and Hamas in Gaza.
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Silver prices have surged due to a supply shortage this year as well as economic conditions that have favored precious metals. (Clark Hodgin/Bloomberg via Getty Images/Getty Images)
“Speculators are taking a few gold chips off the table while Ceasefire in Gaza takes effect as it reduces temperature 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 recovery, reserve diversification and large and growing global sovereign debt, remain entirely valid and keep the bullish outlook intact,” Wong added.
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Silver prices rose above $50 an ounce for the first time on Thursday. (Michael Nagle/Bloomberg via Getty Images / Getty Images)
Gold’s rise this year has been fueled by geopolitical tensions, as well as strong demand from central banks, increased flows to exchange-traded funds (ETFs)expectations of interest rate declines and economic uncertainty arising from tariffs and trade policy changes.
The SPDR Gold ETF Trust, the largest backed by physical gold, is up nearly 50% this year. While smaller mining ETFs, including the MicroSectors Gold Miners 3X Leveraged ETN, have grown more than 740% as the best-performing ETF this year, according to VettaFi tracking.
| Teleprinter | Security | Last | Change | Change % |
|---|---|---|---|---|
| GLD | SPDR GOLD SHARES TRUST – USD ACC | 365.44 | -6.90 |
-1.85% |
| GDXU | BANK OF MICROSECTORS OF MONTREAL GOLD MINERS 3X | 198.96 | -29.58 |
-12.94% |
Silver’s 69% rise this year is due to similar factors, as well as a supply shortage in the silver spot market.
ETFs tied to gold’s cousin are also big winners this year, with the iShares MSCI Global Silver Miners ETF up more than 148% and the ProShares Ultra Silver up more than 148%.
| Teleprinter | Security | Last | Change | Change % |
|---|---|---|---|---|
| Scent | PROSHARES ULTRA SILVER – USD DIS | 78.81 | -3.29 |
-4.01% |
| SLVP | ISHARES INC MSCI GLOBAL SILVER MINR ETF | 27.69 | -0.90 |
-3.15% |
A precious metals trader told Reuters that liquidity in the London silver market was limited due to ETF purchases and the movement of metals to the United States.
FED MINUTES SHOW POLICY MAKERS REMAIN CONCERNED ABOUT INFLATION AS THEY WEIGH RATE CUTS
Precious metals like gold have risen this year amid economic uncertainty. (Chris Ratcliffe/Bloomberg via Getty Images / Getty Images)
Markets expect Federal Reserve to continue cutting interest rates after the central bank made a 25 basis point cut last month, the first rate cut this year.
Traders are counting on 25 basis point cuts at the Fed’s next policy meetings in late October and mid-December.
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The Fed’s anticipation of further rate cuts this year comes despite signs that inflation is trending higher and away from the central bank’s 2% target, as concerns about a weakening labor market outweigh policymakers’ inflation concerns.
Reuters contributed to this report.
