Silver futures are rallying more than 1% to start the trading week, extending their double-digit gains from May into the new month. With global economic uncertainty still lingering in financial markets and fears of price inflation on the other side of the lockdown, could silver top $19 this week?
July silver futures surged $0.261, or 1.41%, to $18.76 per ounce at 19:02 GMT on Monday on the Comex division of the New York Mercantile Exchange. The white metal has been on a tear since cratering to below $12 in March. Silver prices enjoyed a 5% weekly gain last week, adding to its 25% spike in May. The metal commodity wiped out its 2020 losses and is now up 5% year-to-date.
Gold, the sister commodity to silver, is struggling to find direction to kick off the trading week. August gold futures tumbled $2.20, or 0.13%, to $1,749.50 per ounce. The yellow metal recorded a modest 1% gain last week and posted a tepid 2% increase last month. So far this year, gold is up 15%.
The white metal has benefited much from the same developments impacting gold prices. Silver is testing $19 on rising US-China trade and geopolitical tensions, which is expected to escalate in June as the two sides engage in a war of words regarding commerce and Hong Kong. Silver has also benefited from boost in exchange-traded fund (ETF) inflows.
Meanwhile, the growing number of economies reopening has also been bullish for silver. Silver is not only utilized as a hedge against inflation, but it also possesses an industrial usage, too. With various markets hitting the restart button, there has been a steady increase in demand.
According to a research note from Commerzbank, silver is currently in greater demand than gold. Commerzbank analyst Daniel Briesemann wrote last week:
“Silver has recently made good some more ground vis-à-vis gold, as can be seen from the fact that the gold/silver ratio has dipped below 100.
It is also evident from the ETF inflows that silver is currently in greater demand than gold. The silver ETFs tracked by Bloomberg have registered inflows of 2,479 [metric] tons since the beginning of April, i.e. since the start of the quarter. This has seen holdings rise by 12.3%, allowing silver to overtake gold in this respect. The increase in gold ETFs during the same period has been 10.4%. Inflows into silver ETFs since the start of the year now total 3,786 tons (+20%), which equates to almost two months of global silver mining production.”
In other metal markets, July copper futures soared $0.0485, or 2.00%, to $2.474 per pound. July platinum futures climbed $27.20, or 3.12%, to $901.90 an ounce. July palladium futures picked up $15.60, or 0.79%, to $1,988.50 per ounce.