Silver Photo: VCG

Silver prices extended their record-breaking rally for an 11th straight trading session as of Thursday, climbing above $60 per ounce, with intraday levels at times exceeding $62.

Wind data showed that as of 6:00 pm on Wednesday, the highest quote for London silver exceeded $61.60 per ounce, more than 110 percent above its low at the start of the year, according to media reports. The gain has outpaced gold, which has risen about 60 percent so far this year.

As of 4:47 p.m. on Thursday, COMEX silver extended its gains to above $62.3 per ounce, up more than 2.2 percent on the day.

A Chinese expert noted that the latest silver surge reflects a combination of short-term financial sentiment and longer-term structural tightness, while advising consumers to plan their assets prudently.

The recent rise in silver prices is largely a catch-up rally after years of underperformance and a correction of the unusually wide price gap that had opened with gold, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Thursday. 

As both metals belong to the same asset class and often move in tandem, the divergence seen earlier this year led many investors to view silver as under-valued, prompting substantial capital inflows that quickly drove prices higher, he said.

Silver's market, however, is far smaller and less liquid than gold's. When large volumes of capital enter, supply-demand imbalances can form rapidly, amplifying price swings. Unlike the deeper and broader gold market, where buying is more easily matched by selling, silver has fewer participants, making it more vulnerable to sharp moves, according to Xi Junyang. "This latest rally is more a reflection of market structure and price-gap adjustment than a reassessment of silver's fundamental value."

Market momentum may continue to back up silver in the short term, but its recent gains have already exceeded reasonable levels, signaling a build-up of risks, an expert said.

Looking back at its performance this year, silver's momentum had begun to emerge. On July 10, London silver's year-to-date gain reached 28.07 percent, surpassing London gold's 26.64 percent increase for the first time, and the gap has continued to widen since then, Beijing Business Today reported on Thursday.

Some market participants believe that growing expectations of a US Federal Reserve rate cut have become the key driver behind silver's sharp rally, according to the Beijing Business News.

Reuters reported on Thursday that the Federal Reserve delivered a 25-basis-point rate cut on Wednesday, lowering the federal funds rate to 3.50 to 3.75 percent, in line with market expectations. Some investors reduced their positions out of concern that the Federal Reserve may cut rates by less than expected next year, leading to a slight decline in international gold prices.

At the close, gold futures for February delivery on the New York Mercantile Exchange settled at $4,224.7 per ounce, down 0.27 percent.


Global Times