Gold isn\u2019t the only precious metal benefitting from economic uncertainty and the crisis in the banking sector. Silver prices last month climbed to their highest in a year, with room to move higher as the global market for the metal this year looks to post its second largest supply deficit in 20 years.<\/p>\n
\u201cDemand for physical silver, and gold for that matter, is showing overall investor concern over the state of the economy, geopolitical turmoil, and potentially persistent inflation,\u201d said Stephen Gardner, director at ETF Managers Group, the issuer of the ETFMG Prime Junior Silver Miners exchange-traded fund \u201cThe risks are creating a growing willingness to park money in safe-haven assets,\u201d he said. Also, the U.S. dollar strength that served as a headwind to precious metals during most of last year has been easing since October, he said.<\/p>\n The most-active contract for Comex silver futures SIN23, Gold GCM23, Read:<\/strong> Why gold prices hitting a record-high may be \u2018inevitable\u2019 as investors seek havens for shelter <\/p>\n Gold and silver prices are showing \u201cfear and uncertainty in the U.S. dollar system,\u201d said Keith Weiner, chief executive officer and founder of Monetary Metals.<\/p>\n \u201cThose with dollars realize they are at risk of losing them,\u201d he said. That almost happened with Silicon Valley Bank and Signature Bank, and the \u201cpowers that be came to the depositors\u2019 rescue but no one can be certain this will hold true going forward.\u201d<\/p>\n See:<\/strong> Fed lifelines for banks in the spotlight after First Republic failure pushes seized assets above 2008 peak<\/p>\n \u201cNow is the time of heightened risk,\u201d said Weiner. Gold and silver are money and people buy them to \u201cavoid credit risk.\u201d<\/p>\n The ICE U.S. Dollar index \u201cInvestors continue to flee volatile supply assets\u201d like the dollar, and seek \u201cfixed supply assets like silver,\u201d said Will McDonough, co-founder and chief executive officer of EMG Advisors. \u201cThis is a clear signal that the U.S. dollar has devalued and is no longer the safe-haven asset it once was, and that investors seek security in metals and physical tangible materials they know have rising demand and predictable supply.\u201d<\/p>\n Gold is \u201cless applicable\u201d to today\u2019s economy, said McDonough, given that the yellow metal has no correlation to money supply anymore and has few industrial uses. Silver, on the other hand, has far more industrial uses \u2013 and copper much more so, he said, adding that EMG Advisors predicts rising interest in copper as the \u201cgreen metal anchoring electrification.\u201d<\/p>\n Read:<\/strong> Here\u2019s what the U.S. plan for EV sales means for critical metals such as copper and lithium<\/p>\n Silver, meanwhile, is \u201csplit\u201d between investment demand and industrial demand, says ETFMG\u2019s Gardner. Gold typically rises more so than silver at the onset of economic fears, and silver\u2019s monetary component has led to its outperformance of copper, he said.<\/p>\n Year to date as of Wednesday, gold futures have climbed 11.5% and silver\u2019s up 6.8%, while copper HGN23, The current ratio of gold to silver is around 79 to one, meaning it would take roughly 79 ounces of silver to buy once ounce of gold. That\u2019s relatively high by historical standards, but the ratio has fluctuated quite a bit in the last couple of years.<\/p>\n When asked to discuss the price ratio, Weiner said that in the short term, the market is \u201creasonably well balanced,\u201d and that over the long term, silver is likely to outperform gold.\u201d<\/p>\n Record silver demand last year contributed to a global supply deficit of 237.7 million ounces in 2022, the second annual deficit in a row, and \u201cpossible the most significant deficit on record,\u201d according to the Silver Institute\u2019s 2023 World Silver Survey, researched and produced by Metals Focus, released in April.<\/p>\n Total global silver demand grew by 18% to 1.242 billion ounces last year, with demand from the industrial segment posting a record of 556.5 million ounces, according to the survey. Global silver supplies, meanwhile, were little changed as mine production in Peru took a hit due in part to social unrest, while production in Mexico, Argentina and Russia climbed. Total supplies were at 1.0047 billion ounces last year from 1.0045 billion in 2021, the survey showed.<\/p>\n The World Silver Survey shows expectations for another \u201csizable\u201d deficit in global silver supplies this year of 142.1 million ounces, which it says would be the \u201csecond-largest deficit in more than 20 years.\u201d It expects that global silver inventories by the end of 2023 will have fallen by 430.9 million ounces from their end-2020 peak. That\u2019s equivalent to more than half of annual mine production, it said.<\/p>\n The imbalance between silver supply and demand, which started in 2021, pared with the expectation that the Federal Reserve will pause interest-rate hikes later this year will be a \u201ctailwind for the silver price,\u201d said Gardner.<\/p>\n He said outflows of physical silver and gold exchange-traded funds had slowed from the middle of last year into year-end, which he believes indicates that \u201csentiment is changing from hated and out of favor to more optimistic, which we\u2019re seeing in the recent performance\u201d for the metals.<\/p>\n Looking ahead, according to the World Silver Survey, silver prices may move \u201cbroadly sideways over the next few months, before \u201csuffering liquidations in the second half of the year.\u201d By the fourth quarter, prices may trade in the low $18s, it said, and the full-year average price will likely be $21.30, which is 2% lower year on year.<\/p>\n Near term, Monetary Metals forecasts silver prices close to $28, and gold at $2,200 an ounce, said Weiner. That suggests record-high futures price for gold, and the highest futures price for silver since mid-2021.<\/p>\n \u201cSupply-and-demand factors suggest prices are likely to rise,\u201d said Weiner, but \u201cconditions change daily.\u201d<\/p>\n<\/p><\/div>\n
\n SILJ,
\n
\n SI00,
\n
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\n settled as high as $25.93 an ounce on April 13, the highest since April 2022, according to Dow Jones Market Data. Prices finished on Wednesday at $25.68. <\/p>\n
\n GC00,
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\n meanwhile, trades near its highest recorded price levels, settling Wednesday at $2,037, compared with the record most-active contract settlement of $2,069.40 from Aug. 6, 2020.<\/p>\n
\n DXY,
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\n a gauge of the dollar\u2019s strength against a basket of major currencies, trades around 2% lower year to date, providing some support for dollar-denominated prices of gold.<\/p>\n
\n HG00,
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\n has lagged with a more modest 0.9% gain.<\/p>\n