Silver prices have stolen the show today as the shiny metal reaches $30 per ounce, eyeing its highest closing price in more than 10 years. Indeed, silver futures are up over 6% today, pushing silver to around $31 an ounce.
While silver reached $30/oz in intraday trading back in 2021, it hasn’t finished the day over that price in a decade.
There’s plenty of potential reasons for silver’s recent spike. Signs that inflation is slowing, the notion of falling interest rates, the recent meme stock frenzy and general financial and industrial strength may all be playing a factor in silver’s climb.
Silver prices have also likely risen as a result of supply issues surrounding the metal. Indeed, 2024 marks the fourth year of a silver shortage, with this year in particular being one of the most intense on record.
Silver has enjoyed a strong year thus far. Indeed, the metal is up 30% year-to-date (YTD). Despite this, it’s still historically cheap compared to gold. Indeed, per Seeking Alpha, it takes about 80 oz of silver to purchase just one ounce of gold. This is far higher than the 20-year average ratio of 68:1.
Gold prices have also climbed quite substantially this year. Indeed, gold futures are up about 17% YTD. Just last month, gold prices reached a new all-time high of about $2,431 per ounce before falling back down. Gold prices aren’t too far behind currently, however, at $2,415/oz.
Will Silver Prices Continue to Rally in 2024?
Some believe the metals have even further to go this year. According to JC O’Hara, Chief Technical Strategist at ROTH Capital, the price of gold “now appears poised to move higher and break out of the recent highs made in April.”
“We can set a technical upside price target to $2,600,” said O’Hara.
In the same note, O’Hara stated that if silver prices can move above $30, silver “will have little resistance until the $35/$37 area.”
Metals prices tend to move inversely with interest rates. That’s why the somewhat cool inflation data — which strengthened the case for rate cuts this year — caused a spike in metals prices.
Whether the rally continues, then, may be dependent on good inflation data over the next few months — and further evidence of rate cuts to come.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
