Silver's Overlooked Rally May Put Gold in the Shade
Factors from Chinese industrial demand to tight supply are causing gains to accelerate.
A bit of shiny silver can’t make up for lots of lackluster zinc or lead, squeezing supply.
Photographer: Keith Bedford/Bloomberg
It’s not only gold that glitters. Since touching its weakest level in more than a decade in March, silver has doubled to a seven-year high of almost $23 an ounce. Partly, it’s a rally fueled by the same low-yield, weak-dollar haven dynamic that has pushed bullion to within spitting distance of a record. Investor demand is booming and silver — which is the best conductor of electricity — has industrial uses, too. Short-term supply, meanwhile, has been dented by pandemic-related closures. The metal can keep shining.
Silver tends to loosely track gold. Like the yellow metal, it is benefiting from investors’ jangled nerves, with the global economic recovery looking slow and further coronavirus outbreaks almost certain. Rock-bottom borrowing rates have also reduced the opportunity cost of holding a non-interest-bearing asset, and there’s no sign of a change.