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It took him a while to get back into gear, but silver is now in fourth gear. Prices have jumped above 28 dollars an ounce, to the highest since 2021, and thanks to this week’s rally the performance since the beginning of the year beats that of gold, +16% against +14% of the yellow metal (in dollars).
Gold – fresh from a long sequence of historical records – took a break on Wednesday 10th after the higher than expected data on US inflation in March, which further cools expectations of a cut in interest rates by the Fed : prices remained little changed, below 2,340 dollars an ounce on the London spot market and below 2,360 dollars on the Comex.
Silver, on the other hand, once again updated its three-year record, to 28.65 dollars, supported by signs of a strong recovery in physical demand, as well as by a return of attention from investors, who, despite the sensational rally in gold, have been slow to to manifest itself.
Silver had “left behind”, on valuations which in relation to gold had collapsed to the lowest levels in over ten years: the gold/silver ratio, a key parameter for many traders, had risen above 90: in practice more than 90 ounces were needed of silver to buy one of gold. Now it has fallen below 84, “not far from the average of the last five years, which is around 83”, observes Ole Hansen of Saxo Bank.
The chase could continue, thanks also to the characteristics of silver: a precious metal, but with significant industrial uses. It is also used increasingly in solar panels, a sector which according to Reuters sources has stimulated an extraordinary boom in purchases in India: the country imported 2,932 tonnes of silver in the first two months of this year, of which 2,295 in February, against 3,625 tonnes for the whole of 2023.