The price of silver has strongly outpaced that of gold over the past few trading sessions. On MCX, silver prices today surged 6.6% to ₹61,130 per kg. Silver had also jumped 6% in the previous session. In just three days, silver has surged over ₹8000 per kg. In comparison, gold has posted moderate gains though it today hit the ₹50,000 per 10 gram mark for the first time in futures market.
In global markets, silver prices jumped to the highest in almost seven years on bets on a rebound in industrial demand. Silver is used in manufactured products ranging from solar panels to electronics. Spot silver climbed as much as 7.2% to $22.8366 an ounce, the highest since 2013.
Technical breakout with huge volumes have underpinned the international silver, said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
Commodity prices have risen on optimism over China’s recovery, promising vaccine news and landmark stimulus package clinched by Europe’s leaders.
Meanwhile, supply concerns on silver remain high amid rising virus cases in Mexico and Latin America, say analysts.
European Union leaders on Tuesday agreed on an unprecedented stimulus package $850 billion to pull their economies out of a virus-induced recession.
“Silver has rallied sharply amid concurrent gains in gold and industrial metals. Gold has risen to 2011 highs amid weaker US dollar and additional stimulus measures. Improved risk sentiment and weaker US dollar has benefitted industrial metals as well,” Kotak Securities said in a note.
Gold and silver are the top performers in the Bloomberg Commodity Index this year as investors clamor for safe-havens against further economic fallout from the virus. Low interest rates amid easy monetary policies have also bolstered the appeal of the non-interest-bearing assets. This has sent holdings in exchange-traded funds backed by the metals to all-time highs.