The Zhitong Finance App learned that the spot price of silver broke through $30 per ounce, the highest level in more than 10 years. On Friday, the price of silver closed up 6.5% to $31.49 an ounce, the highest level since February 2013. Since this year, silver has soared 32%, surpassing gold and becoming one of the top performing major commodities this year.
At a time when silver prices are rising, investor interest is rising, and the macroeconomic background is becoming more and more optimistic. The market expects a shortage of silver for four consecutive years. Silver's rise accelerated on Friday, driven by the spillover sentiment in the broader metals market.
Phil Streible, chief market strategist at Blue Line Futures, said on Friday: “This week is a bit like a reinterpretation of meme stocks.” “Naturally, these speculators explore different fields. And silver is usually what they like.”
In 2021, at a time when GameStop (GME.US) and other small-cap stocks were rushing to buy, silver became the target of Reddit retail investors.
Daniel Ghali, a senior commodity strategist at TD Securities, said that a silver price above $30 may trigger massive exchange-traded fund (ETF) buying activity, thereby increasing the risk of silver being in short supply.
Although silver is rising faster than gold, it is still relatively cheap.
The trends of these two precious metals are mostly synchronized because they both have similar macro and currency hedging characteristics. As gold hit a record high, driven by central bank purchases, interest from retail investors soared, and bets on the Federal Reserve's imminent interest rate cut resurfaced, and silver also rose.
Silver has dual characteristics, both as a financial asset and as an industrial input. The Silver Association said this metal is a key component of solar panels, and with the industry's strong growth, silver usage is expected to reach record levels this year. In this context, the silver market will experience a supply shortage for the fourth year in a row, and this year it may face the second largest supply gap on record.