Silver
entered a bull market after climbing to a 10-month high amid positive
signs for Chinese industrial demand and decreasing bets the Federal
Reserve will raise U.S. interest rates.
China’s economy
stabilized in the first quarter as gross domestic product rose 6.7
percent from a year earlier, boosting speculation that demand won’t slow
for industrial metals. Investors are betting there’s a 55 percent
chance Fed officials will increase rates by the end of 2016, down from
93 percent at the beginning of the year. Lower rates are a boon to
precious metals, which don’t offer yields or dividends.
“The market has spotted a shiny gem among the stones and is trying to capitalize on the fact that silver historically has very sharp moves,” Tai Wong, the director of commodity products trading at BMO Capital Markets in New York, said in a telephone interview. “The rally in base metals is also helping silver specifically, given its significant industrial applications.”
Gold-Silver Ratio
Silver futures for May delivery gained 4.4 percent to settle at $16.972 an ounce at 1:50 p.m. on the Comex in New York. That marks a more-than 20 percent gain from a recent closing low in December, meeting the common definition of a bull market. The metal touched $17.11, the highest since June.Aggregate trading in Comex silver was more than double the 100-day average for this time, according to data compiled by Bloomberg.
The gold-silver ratio fell to the lowest this year. Assets
backed by silver in exchange-traded funds are approaching a record and
last month total holdings increased 5.2 percent, the biggest jump since
2010, according to data compiled by Bloomberg.
In ETFs and other precious metals:- Holdings in exchange-traded funds backed by gold were little changed at 1,765.3 metric tons on Monday, according to data compiled by Bloomberg.
- Gold futures for June delivery rose 1.6 percent to $1,254.30 an ounce on the Comex
- On the New York Mercantile Exchange, platinum and palladium gained.
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