Silver jumped more than 2 per cent to a record high, with traders placing speculative bets on the white metal given ongoing supply tightness and rising expectations for an interest-rate cut in the US. Gold was steady.
Silver rose as high as US$57.86 an ounce, before paring some of its gains. The precious metal has risen for six consecutive days and doubled in value this year, outpacing a roughly 60 per cent rise in gold.
A record amount of the metal flowed into London in October to ease a historic squeeze in the world’s biggest silver trading hub. This in turn has put other centres under pressure: inventories in warehouses linked to the Shanghai Futures Exchange recently hit their lowest in nearly a decade, bourse data shows, and the cost of borrowing the metal over one month remains elevated.
“Shortages in the global market as a result of the recent squeeze in London are still being felt,” said Daniel Hynes, a commodity strategist at ANZ Group Holdings. “With gold taking a breather, it appears investors have turned their attention to silver.”
Silver, like gold, has also been boosted by increased expectations that the US Federal Reserve will cut interest rates this month. Markets are fully pricing in a quarter-point rate cut on continued weakness in the American labour market and a crescendo of dovish comments by Fed officials over the last week. The release of economic data delayed by the US government’s six-week shutdown has also supported the case for lower borrowing costs, which typically benefit non-yielding precious metals.
