By Barani Krishnan
Investing.com - The bull-run in silver showed no signs of slowing on Tuesday as the metal used in jewelry to electronics added another 7% to a market that was already up 80% from the lows of March.
The white metal has been on a winning streak over the past two-and-half months, gaining in nine of the past 10 weeks to culminate in its rise to above $21 per ounce from 11-year lows under $12 hit in March.
Silver’s red-hot performance has overwhelmed even that of gold, often referred to as the “King of Precious Metals,” despite others in that category, such as palladium and rhodium fetching more per ounce now than the yellow metal. Gold hit a milestone of its own on Tuesday, reaching a nine-year peak just shy of $1,845.
“Silver has also been on fire and continues to play catch up to gold,” said Ed Moya, analyst at New York’s OANDA.
“The reopening trade (from Covid-19) is triggering strong industrial demand for silver and now that the $20 level has been cleared, bullish momentum might not see much resistance until it's closer to the $22.50 level.”
Silver futures on New York’s Comex settled up 1.365 cents, or 6.8%, at $21.557 per ounce after reaching $21.712 earlier. That was the highest since October 2013, when Comex silver got to $23 an ounce.
U.S. gold futures for August delivery on Comex settled up $26.50, or 1.5%, at $1,843.90 per ounce. That was the highest since September 2011, when Comex gold hit a record high of $1,911.60.
“If gold sustains its momentum, buying can intensify taking it further to a record high of $1,920 without much resistance,” said Sunil Kumar Dixit, an independent analyst on precious metals.
But the gold rally may not continue in a straight line, he said.
“A profit-booking cannot be ruled out, and this may push gold to retest support areas at $1,830-$1,815-$1,805,” Dixit said. “If $1,800 fails to hold, look for $1,791 below which bears can trigger a sell off to $,1770-1750 areas which may change the trend in the short to mid term.”