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.”
Markets are fully pricing in a quarter-point rate cut on continued weakness in the American labour market and dovish comments by US Federal Reserve officials. Photo: EPA
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.