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CNBC: Silver is Up Over 70% in a Year. Here's Why Experts Say it Could Have Further to Go

May 13, 2021

Article by Holly Ellvatt in CNBC fincial website

It’s often overlooked in favor of its lustrous cousin gold, but the price of silver has jumped over 70% in the last year, with commodity strategists saying the rally is likely to continue as the global economy reopens.

Demand for the precious metal has shot up in the past 12 months. Silver was trading around $27 an ounce on Wednesday, a 74% rise from a year ago when the spot price was around $15.5 per ounce. In comparison, gold prices have risen 6.4% in a year.

From electronics to photography, jewelry and coins, silver is integral to numerous everyday products.

Its high electrical conductivity and durability gives it industrial and technological applications, with almost every computer, mobile phone, automobile and appliance containing silver, according to the Silver Institute. The association’s data show there has been more demand than supply of the semi-precious metal so far in 2021.

“Industrial demand is probably the main reason why we’ve seen silver outperform gold, as it has over the last year ... part of that (rise) is definitely coming from industrial metals which have really been on a tear. If you look at copper prices, they’ve more than doubled since hitting a low-point last year,” he added.

Additional factors have also played into silver’s rise, Hanson said, such as the shift towards green technologies which have spurred a rise in demand for industrial metals such as silver which are used in solar panel production, for instance.

Silver also stands to gain from the reopening of the global economy following the coronavirus pandemic given a ramp up in industrial production as well as maintained investment demand, according to Max Layton, managing director of Commodities Research at Citi Global Markets.

He told CNBC on Tuesday that silver had benefited from investment demand during the pandemic, and was likely to continue to do so.

“The pandemic resulted in a major decrease in U.S. real interest rates, and a shift in allocations out of wealth and household savings into gold and silver. This more than offset ......

To read this article in CNBC financial website in its entirety, click here.

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