Silver hits record above $60 per oz

Silver is trading at record highs as the precious metal continues to attract bids amid concerns over a market deficit.

Spot silver rose 4% on Tuesday and hit a new peak of $61.25 per oz. on Wednesday morning, keeping the momentum of a record-breaking rally that has lasted nearly two months.

The rally takes silver past the $60-an-oz. mark for the first time ever. The metal has now doubled in value this year, even surpassing the 60% gain seen in gold.

View precious metal price charts on Mining.com, part of the Northern Miner Group. (Source: https://www.mining.com/live-chart/silver/ )

“It’s not clear exactly what drove the big single-day move,” BMO Capital Markets wrote on Wednesday. “But we note that there has been a steep draw-down in Shanghai Futures Exchange inventory over the last month, and Commodity Exchange (Comex) inventory in New York is close to historical highs (about 450,000 tonnes today).”

Traders are weighing the potential for import tariffs on critical minerals as the United States conducts a Section 232 investigation that would give President Trump authority to adjust imports if they are found to threaten to impair national security, BMO commodities analysts Helen Amos and George Heppel said in the note.

Export rules

“In addition, silver is part of a list of metals (along with tungsten and antimony) that China’s Ministry of Commerce (MOFCOM) has recently tightened export licensing rules on, requiring strict eligibility criteria for exporters,” the analysts said. “Silver’s appeal in China may also have recently improved following China’s value-added tax (VAT) rebate change on gold in early November.”

Last month China effectively ended a long-standing VAT rebate/offset for most gold retailers when selling gold purchased from the Shanghai Gold Exchange. This change significantly impacts the gold market and is expected to increase consumer prices.

Also behind the silver price jump was the expectation of a U.S. interest rate cut this week, which would be positive for safe-haven assets such as gold and, by extension, silver.

Silver first surpassed its October peak in a choppy trading session as a chaotic halt on the Comex exchange in late November dried out liquidity. The holiday season and low physical trading in London’s over-the-counter market also amplified price moves.

With files from Jackson Chen.

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