- Spot silver jumped 3% to $67.12 per ounce, marking its sharpest single-day gain in weeks.
- The rally was fueled by a weaker dollar and renewed safe-haven buying amid geopolitical tensions.
- Analysts warn that silver's industrial demand outlook may cap further upside without a catalyst.
Silver Breaks Out
Spot silver climbed 3% to $67.12 an ounce in afternoon trading, breaking above its 50-day moving average for the first time since late January. The move outpaced gold's 1.2% gain, suggesting silver-specific factors at play. Traders cited short-covering after recent declines and a softer US dollar, which fell 0.4% against a basket of currencies.
"The macro backdrop is supportive for precious metals right now," said a commodities strategist at a major bank. "Silver is catching a bid as rates expectations ease and geopolitical risks simmer."
Industrial vs. Safe-Haven Demand
Silver's dual role as both a monetary metal and an industrial input complicates its outlook. While safe-haven flows have lifted prices, concerns about a global manufacturing slowdown persist. China's factory data due next week will be closely watched.
"If industrial demand weakens, silver could give back these gains quickly," warned a metals trader. "But for now, momentum is on its side."
Market Context
The rally comes as silver ETFs saw inflows for the first time in four sessions. COMEX silver futures open interest rose 2%, indicating new longs rather than just short covering. The gold-to-silver ratio, a measure of relative value, fell to 88:1 from 91:1 a day earlier.
Investors are now eyeing the $68 level as the next resistance, with support at $65.50. A break above $68 could open the door to $70.
Correction Note
An earlier version of this article incorrectly stated that silver rose 4%. The correct increase is 3% to $67.12.