An unexpected surge in investor demand is sending silver prices soaring—and speculators and mining companies are digging in.
In the past four months, the metal has upended forecasts, rising 51% to a series of 30-year highs, before inflation. Silver closed Thursday at $29.31 a troy ounce, up from $16.822 at the beginning of 2010.
Among the four major precious metals—the others being gold, platinum and palladium—silver is up 74% this year, on track to be the second-best performing commodity after palladium, which is up 86%. Gold, by contrast, is up 26% and copper just under 28%.
Prices are rising despite oversupply and a lackluster recovery in industrial demand. Many analysts expected those factors would keep a lid on prices in 2010. What they didn’t expect was an overwhelming flow of money into the market from investors eager to ride a commodities rally.
“This is a story almost entirely about investment,” says Stephen Briggs, senior metals strategist at BNP Paribas.
– “Price of Silver Soaring: Investor Fueled 74% Gains Dwarf Gold; Race To Open Mines”, The Wall Street Journal, December 27, A1
Disclosure: Top Gun has no position in The Silver ETF (SLV).