Quick overview

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Silver reached its highest level since February 2012, rising to 4 percent above $35.9 an ounce. I

mproved fundamentals, increased investor interest, and technical momentum likely contributed to the rally. Silver is catching up to gold after falling behind for a few weeks.

 

The two precious metals frequently move in tandem as geopolitical tensions support demand for assets free from counterparty, which implies “renewed interest from momentum-driven investors who are rotating into silver.”. Industrial metal has increased 44% over the past 12 months because of central banks’ high buying pressures and an expanding US-led tariff war that strengthened gold’s appeal as a haven. Silver has trailed behind, up roughly 20%.

Significant inflows into exchange-traded funds backed by silver have also helped the white metal, with holdings rising by 2.2 million ounces on Wednesday, according to data compiled by Bloomberg. In the final week, money managers increased their bullish bets on Comex silver futures

Silver has two distinct personalities; it is valued as an industrial input,  for clean energy technologies, and as a financial asset.

The metal is a component of solar panels, which are becoming popular. In light of this, industry group the Silver Institute predicts that the market will be in deficit for a fifth year. Reports released on Wednesday, however, indicated a slowdown in hiring and a contraction in US services activity.

Swap traders priced in two interest rate cuts from the Federal Reserve, causing Treasury yields to decline.  Lower rates usually work to their advantage since gold and silver don’t pay interest,