Quick Look:
- Silver prices hit a three-year high at $27.25, a 9.4% increase, showcasing a bullish market trend.
- Key drivers include strong industrial data from China, a technical breakout, and a global supply deficit.
- Parallel rise in gold prices, with gold reaching a new high at $2,315, reflecting increased interest in precious metals.
- Silver’s industrial demand is expected to boost its value further, with the potential for decade-high prices.
Silver prices have emerged as a beacon of strength, reaching a three-year peak. The past week saw silver’s value surge by 9%, with the May silver contract settling at an impressive $27.25. Furthermore, this 9.4% weekly increase marks the highest point for the precious metal since June 16, 2021. Therefore signalling a bullish trend that has captured the attention of investors worldwide.
Key Drivers Behind Silver’s 9% Weekly Jump
Several catalysts have been instrumental in propelling silver prices to their current levels. Notably, a robust set of industrial data from China has infused optimism into the market, highlighting its indispensable role in various industrial applications.
Furthermore, a technical breakout above the key resistance level at $25 has further buoyed silver’s market position. The anticipation of global precious metal supplies entering a fourth consecutive year of deficit adds to the momentum. Therefore underscoring the intricate balance between supply and demand dynamics.
Gold Joins Silver, Reaching $2,315 High
Parallel to silver’s stellar performance, gold prices have not been left behind. The gold achieved a fresh record high with a settlement price of $2,315. More than a 3% weekly increase in gold prices underscores the heightened interest in precious metals as viable investment vehicles, further supported by the immense investor attention drawn over the past month.
The precious metals sector has garnered immense investor attention, particularly in the light of renewed expectations of U.S. interest rate cuts in June. Investor anticipation was reflected in the performance of major ETFs, with the SPDR Gold Trust ETF and the iShares Silver Trust posting gains of 9.3% and 12.6% in the past month, respectively.
Silver’s Demand Set to Hit 1.2 Billion Oz
Silver’s edge over gold, particularly due to its extensive industrial applications, sets it apart in the precious metals market. Global demand for silver is projected to reach 1.2 billion ounces in 2024, setting expectations for a banner year with potential prices reaching decade highs. Moreover, various sectors, including silverware and jewellery, anticipate this uptick. Additionally, support from a projected recovery in consumer electronics, a global push for green energy, and burgeoning demand for emerging technologies are driving this surge.
Industry experts, including Fawad Razaqzada, believe silver has significant room for growth, suggesting that the recent technical breakout could herald the start of a long bull market. However, Razaqzada cautions that both metals appear slightly overbought, and a minor pullback would not be surprising.
Silver’s Peak and Gold’s High Stir Markets
Recent events have seen silver prices reaching their highest since mid-2021, with gold trading lower following a record-high settlement. These movements reflect a broader market sentiment that continues favouring precious metals as a hedge against economic uncertainty and a vehicle for substantial returns.
The precious metals market is pivotal, with silver leading the charge. The convergence of favourable industrial data, technical breakthroughs, and a sustained deficit in global supplies points to a bullish outlook for silver. As investors and market watchers closely monitor these developments, the anticipation for what lies ahead in the precious metals sector remains at an all-time high.
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