The price of silver reached record highs ahead of an expected cut in interest rates by the US Federal Reserve, while demand from the technology industry for this precious metal remains high.
Silver broke above $60 (£45.10) an ounce for the first time in the spot market, where precious metals are bought and sold for immediate delivery, the BBC reports.
Gold, which hit record highs earlier this year on concerns about the impact of US tariffs and the global economic outlook, also made gains this week.
Investors typically shift money into precious metals like gold and silver when interest rates fall and the dollar weakens. The US central bank is expected to cut its main interest rate by a quarter of a percentage point on Wednesday.
“This naturally shifts demand towards assets that are considered a store of value, including silver,” said Yeow Hee Chua of Nanyang Technological University.
Movement towards the so-called “safe havens” was the key reason why gold reached new records in the past months, crossing $4,000 per ounce, reports Fena.
The rise in the price of silver can also be seen as a “spillover effect” from the jump in the value of gold, as investors look for cheaper alternatives, said OCBC bank analyst Christopher Wong.
Gold is up more than 50 percent this year, thanks in part to large purchases by central banks. Platinum and palladium prices also rose. Experts say that the value of silver has been further boosted by strong demand from the technology industry that has outstripped supply.
That has helped the value of silver more than double this year, outperforming other precious metals, including gold.
– Silver is not only an investment asset but also a physical resource – said Kosmas Marinakis from the University of Management in Singapore, adding that more and more producers are finding a need for this material.
The precious metal, which conducts electricity better than gold or copper, is used in the production of electric vehicles (EVs) and solar panels. Experts predict that growth in sales of electric vehicles will further increase demand for silver, while advanced car batteries will require even more of the metal.
But it is difficult to quickly increase the supply of silver because most of the global production is obtained as a by-product from mines that primarily exploit other metals such as lead, copper or gold.
The price of silver is further raised by concerns that the United States could introduce tariffs on it as part of President Donald Trump’s trade policy. Fears of possible tariffs have led to a build-up of silver stocks in the US, triggering shortages in other parts of the world.
The US imports about two-thirds of its silver, which is used in manufacturing, jewelry and investment. Producers are racing to secure supplies to prevent business disruptions, which has further pushed up prices on global markets, Professor Marinakis said.
He added that he expects the price of silver to remain high in the coming months.
