Quietly, silver has become hot in 2024. The big question is whether it can stay hot.
As of the April 12 close silver was up nearly 18% in 2024, settling at $28.33 per troy ounce in futures trading in New York.
In the process the metal hit near $30 an ounce for the first time since May 2021.
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Its 2024 year-to-date gain has outpaced that of gold, which closed on April 12 at a record $2,374.19 an ounce and was up 14.6% on the year.
Likewise, the iShares Silver Trust ETF (SLV) , which closed Friday at $25.63, is up 17.7% on the year and ahead of the iShares Gold Trust ETF (IAU) , up 13.5% at $216.89.
The ETFs buy only the metals.
Why silver has been climbing
Silver's rise this year is the product of several causes.
- Sticky inflation that won't let the Federal Reserve cut interest rates.
- Increasing global demand for the metal (plus gold and other precious metals). Global production is either flat or declining.
- Investor interest around the world, but especially in India and China, in protecting wealth in the face of geopolitical tensions.
The last factor was probably the top reason for silver's 4% gain in the past week and 13.7% gain so far in April.
Worries that violence in the Middle East might spin out of control set off buying in gold, silver and platinum all last week.
Iran's drone-and-missile attack, which erupted late Saturday, was mostly turned away by Israel, with help from military forces from the U.S. and U.K.
Prices were flat when futures trading opened in Asia on Monday. At 8:30 p.m. EDT Sunday, silver was quoted at $28.26 an ounce, down 7 cents from Friday. Gold was up $4.10 at $2,378.20.
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What's not clear is whether silver — as well as gold — is getting too pricey. Relative-strength measures for both metals this past week both soared above 80, a clear warning the market for each is overbought.
If the tensions ease, there's a good chance silver and gold prices will ease, too.
And so will mining stocks. The Global X Silver Miners ETF SIL, which tracks silver miners, is up 22.5% since the end of February. Coeur Mines (CDE) has risen 42% this year. Hecla Mining (HL) is up 12.7%.
A few points about silver and precious metals
- Among the biggest holders of gold in the world are central banks.
- Silver is usually a byproduct of mining for another metal, such as copper or lead.
- Individuals in India and China are among the biggest individual owners.
- China is the biggest gold producer. Mexico is the biggest silver producer.
- Two-thirds of the silver consumed in the U.S. is imported.
The crazy silver corner of 1980
Silver's highest price ever — about $50 — was set in January 1980 when the Hunt brothers of Texas tried to corner the market.
They pushed prices so high that the jeweler Tiffany ran an ad in the New York Times that said, "We think it is unconscionable for anyone to hoard several billion, yes billion, dollars worth of silver and thus drive the price up so high that others must pay artificially high prices for articles made of silver from baby spoons to tea sets, as well as photographic film and other products."
The Hunts' bid failed but set off a financial crisis because the brothers couldn't meet their margin calls. In the end, a $1 billion bailout had to be organized to get the crisis resolved.
Some people adjusted to ballooning silver prices.
Silversmiths at Colonial Williamsburg began to source the silver for their products from recyclers. One recycler bought silver from dentists who had put in collection devices to hold on to bits of silver from replacing patients' fillings.
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