Silver Price Leaps Over $20 an Ounce

Precious Metals

For the first time in two years, the silver price toppled over $20 an ounce to 20.64.

The silver price jumped over $20 an ounce to $20.64 for the first time in roughly two years. This is in part due to the United Kingdom’s vote to leave the European Union but also due to Chinese buyers cashing in on the white metal as well.
Until recently, the silver price hasn’t made earth-shattering gains this year, starting 2016 off at just $14.38 an ounce.In April, the metal saw year-to-date highs of $17.82, but dipped back down to $15.93 in June.
However, it’s still made year-to-date gains of 44.74 percent as of July 4 at 12.37 p.m. EST.
Here’s a look at what’s driving the silver price to new heights.

Silver outperformed gold post-Brexit vote

Since Britain’s vote to leave the EU on June 23, silver has surpassed gold in the precious metals sector, according to the Wall Street Journal. The Journal reports that while gold is up 7 percent, silver is up significantly more, at 17 percent.
While silver is undoubtedly less costly than gold, the fact that its prices are rising isn’t going unnoticed, as silver is an alternative option for many who are looking to invest in precious metals.
“Relatively speaking, silver is cheaper. So for people who can’t afford gold look at silver,” Xiao Fu, head of commodity markets strategy at BOCI Global Commodities (U.K.)  told the Journal.
Similarly, CNBC reported that gold investors should consider silver as an option as some analysts say it could “be a better bet than gold.”
“Silver is a metal that most people don’t really think about when they think about precious metals, but it does have this dual property towards both an industrial metal and a precious metal. So many of the reasons that investors chose to invest in gold, silver has many of those properties, at the same time as having a lot of demand coming from industrials,” PureFunds CEO Andrew Chanin told CNBC.
In total, silver prices gained 10.5 percent last week, as a post-Brexit world drove up demand for precious metals, according to the Economic Calendar.

Chinese investors helping silver prices rise

The silver price’s recent success isn’t solely tied to the Brexit vote. Investors overseas are also significant contributing factors to the white metal’s s rise as buyers in China have been quick to take the plunge.
The Economic Calendar reported on July 4 that silver futures were trading higher for a fourth consecutive session, since Jun 28, in China. Overall, futures contracts for the metal reached $663 a kilogram, or 4,119 yuan, for the day.
Sam Laughlin, a trader at MKS Pamp Group, told the Wall Street Journal that silver is a safe-haven asset, especially during times of uncertainty. He projects “further swings ahead in the [silver] market, which, he said, typically has a more “volatile nature” than the markets for metals, like gold.

Silver stocks rising

Naturally, while the silver price has skyrocketed in the last week, a number of silver stocks have also seen an increase. Here’s a quick look at some companies whose shares have made gains over the last five days:

  • Impact Silver (TSXV:IPT): Shares of Impact Silver have risen significantly over the last five days by 38.03 percent  to $0.98 per share. Over one day, it has seen an increase of 25.64 percent alone, while its year-to-date increase is 716.67 percent overall, which is a $0.86 leap;
  • Fortuna Silver Mines (TSX:FVI):  Fortuna Silver’s shares have jumped 10.63 percent over a one-day period. However, the company’s five-day increase is slightly more, coming in at 22.28 percent to bring the company’s share price to $9.99;
  • Endeavour Silver (TSX:EDR): For a five-day period, Endeavour Silver’s shares have increased 7.74 percent, a $0.39 jump to $5.30 per share. Year-to-date, the company’s share price has gained 167.17 percent overall.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.

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