Silver hits $50 per ounce, first time in 45 years
What's the story
Silver has hit a new high, crossing the $50 mark per troy ounce (~31gm) for the first time since 1980. While this is the first time it has surpassed $50 since then, it previously reached a high of $49.80 in 2011. The precious metal has seen a massive price surge of nearly 75% this year alone. The spike is due to investors looking for safe havens amid geopolitical and economic uncertainty, as well as strong industrial demand and supply deficits.
Market dynamics
Silver's industrial applications and supply deficit
Along with investor demand, silver's industrial applications in data centers, solar panels, and smartphones have also contributed to its price surge. "Its dual role as an industrial metal and safe-haven asset has amplified the rally," Ewa Manthey, a commodities strategist at ING, said. The silver market is also facing a structural supply deficit due to stagnant mining output not meeting demand.
Precious metals
Gold's price surge and its impact on other precious metals
Gold has also seen a price surge in the last two years as investors have turned to safe havens. Central banks reducing their dollar dependence and building gold reserves have also contributed to the price increase. The safe-haven rally has extended to other precious metals such as silver and platinum this year, with both outperforming gold in terms of percentage gains.
Investment options
How to invest in silver?
Investors looking to invest in silver can do so by buying bars or coins or investing in silver-backed exchange-traded funds (ETFs). The iShares Silver Trust ETF has seen a massive surge of nearly 68% this year. "Silver's steady climb is turning into a breakout," said Marina Smirnova, Chief Investment Officer at Sprott Asset Management.