Silver Hits $59 Record on Heavy ETF Buying and Low Supply

Silver extended its advance on Friday, reaching $59.33 per ounce, the highest level ever recorded. The metal is set for a second week of gains as funds continue to add positions through exchange-traded products.

Holdings in silver-backed ETFs have climbed sharply this week, with additions over the past four sessions already exceeding any full week since July. The buying has pushed prices higher even as momentum gauges show stretched conditions. The 14-day relative strength index has stayed close to 70 throughout the week, a level traders use to track overheated markets.

The price of silver has doubled this year, supported first by a physical squeeze in London and now by tightening availability elsewhere. Stocks held in China have dropped to their lowest level in about ten years, adding pressure to secure supply.

“Silver is no longer trading in gold’s shadow,” said Hebe Chen, analyst at Vantage Markets in Melbourne. “Industrial demand is expanding at a pace the supply side is struggling to match.”

Expectations of a Federal Reserve rate cut next week have also kept buyers active. Lower policy rates reduce the opportunity cost of holding metals that do not generate yield. Market pricing remained steady after U.S. jobless-claims data showed filings falling to a three-year low.

Analysts at Citigroup, including Max Layton, see scope for prices to reach $62 per ounce within three months, citing investment flows and a physical shortfall.

Silver plays a key role in electronics, solar equipment and medical applications. Global use has exceeded mine output for five straight years, driving competition for available material.

By late trading in New York, silver was holding above $59, up more than 4.5% this week after last week’s 13% jump. Gold, platinum and palladium also gained. The Bloomberg Dollar Spot Index slipped marginally.

Also Read: Silver Price Reaches New Record Above October Peak