Silver surpassed $50 an ounce for the first time on Thursday amid a supply shortage and an economic environment that bolsters precious metals.
Spot silver briefly rose above $51 an ounce during Thursday’s trading session after breaking the $50 an ounce threshold earlier in the day. It has since dipped back below $49 a share where it opened on Thursday. The last time silver traded around these levels was January 1980.
Spot gold prices fell 2% on Thursday after they crossed the $4,000 on Wednesday for the first time.
Precious metals investors booked profits in both silver and gold after prices for the safe haven assets declined in the wake of a ceasefire deal announced in the Israel-Hamas war in Gaza.
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“Speculators are taking some gold chips off the table as the Gaza ceasefire takes effect since it reduces the temperature in a historically volatile region,” said Tai Wong, an independent metals trader, in a Reuters report.
“Gold and silver may need to consolidate further, but the primary drivers of the rally, reserve diversification and large, growing global sovereign debt, remain entirely valid and keep the bullish outlook intact,” Wong added.
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Gold’s rally this year has been driven by geopolitical tensions, as well as robust demand from central banks, rising inflows to exchange-traded funds (ETFs), expectations of interest rate cuts, and economic uncertainty stemming from tariffs and trade policy shifts.
The SPDR Gold ETF Trust, the largest backed by physical gold, has advanced nearly 50% this year. While smaller mining ETFs, including MicroSectors Gold Miners 3X Leveraged ETNs, have advanced more than 740% as the top performing ETF this year, as tracked by VettaFi.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GLD | SPDR GOLD SHARES TRUST – USD ACC | 387.39 | +6.60 | +1.73% |
| GDXU | BANK OF MONTREAL MICROSECTORS GOLD MINERS 3X | 245.38 | +26.28 | +11.99% |
Silver’s 69% rise this year has been driven by similar factors, as well as a supply shortage on the spot silver market.
ETFs tied to gold’s cousin are also big gainers this year, with the iShares MSCI Global Silver Miners ETF up over 148% and ProShares Ultra Silver up more than 148%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AGQ | PROSHARES ULTRA SILVER – USD DIS | 95.04 | +7.96 | +9.14% |
| SLVP | ISHARES INC MSCI GLOBAL SILVER MINR ETF | 30.20 | +1.36 | +4.72% |
A precious metals trader noted to Reuters that liquidity in the London silver market is limited due to ETF buying and metal being moved to the U.S.
FED MINUTES SHOW POLICYMAKERS REMAIN CONCERNED ABOUT INFLATION AS THEY WEIGH RATE CUTS
Markets expect the Federal Reserve to continue cutting interest rates after the central bank moved forward with a 25-basis-point cut last month, the first rate cut this year.
Traders are pricing in 25-basis-point cuts at the Fed’s upcoming policy meetings in late October and mid-December.
The anticipation of additional rate cuts by the Fed this year comes despite signs inflation is trending higher and moving further away from the central bank’s 2% target, as concerns about a weakening labor market outweigh policymakers’ inflation worries.
Reuters contributed to this report.
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