Silver hits lifetime high. Will the rally continue?
Silver prices in the domestic market are at lifetime highs amid multiple catalysts like safe-haven demand due to escalating geopolitical tensions, hopes of US interest rate cuts, speculative buying, and a sharp rally in industrial metals. Meanwhile, the performance of the benchmark London spot silver remained sluggish but hovering near three-year highs.
In the key MCX futures platform, prices reached an all-time high of Rs 84,515/kg last week, gaining about 12% in the last two weeks. A similar move was witnessed in overseas platforms, but the metal was trading down by over 40% from its lifetime high of $49.51 an ounce tested in April 2011.
The swift rise in prices is primarily due to its unique industrial properties, which set it apart from gold. Key industrial metals like Copper, Aluminium, Zinc, and Lead prices have risen sharply since April on worries over supply constraints. This has prompted speculators to bet largely on silver.
The ongoing bullish rally in gold also had a positive influence on silver prices. Historically, silver and gold, both considered precious metals, are often influenced by similar market conditions. Due to this similarity, both can exhibit similar price movements, with silver prices, often following the trends of gold prices.
In the past few years, the price performance of silver has been different from gold. While silver is influenced by both investment and industrial demand, its industrial uses can create additional volatility in its price compared to gold, which is primarily driven
