(Bloomberg) — Silver extended gains to trade just below a 13-year high while platinum hit highest level in more than two years, signaling growing investor appetite for precious metals used by the industrial sector.
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Spot silver rose on Friday, following a 4.5% move in the previous session that saw it edge above $36 an ounce for the first time since February 2012. Platinum’s rally continued, gaining as much as 1.2% to a high of $1,154.73 an ounce.
The commodities were aided by technical momentum across the metals complex as well as improving fundamentals, with strong appetite for physical silver in India and resurgent Chinese platinum demand reinforcing the rallies, according to a note from Nicky Shiels, head of metals strategy at Geneva-based MKS PAMP SA.
Silver — and oftentimes platinum — tend to trade in tandem with gold, which is seen as a time-honored haven in times of geopolitical uncertainty. Gold is up more than 40% in the past 12 months, as an expanding US-led tariff war boosted its safety appeal and central banks maintained elevated levels of buying.
While silver and platinum — up 19% and 13%, respectively, in the 12-month period to Thursday — have lagged behind their more expensive precious metal peer, they are also valued by the industrial sector.
Silver is a key ingredient in solar panels, while platinum is used in catalytic converters and laboratory equipment. Both markets are heading for a deficit this year, following several years where demand has outstripped supply.
A hold above $35 remains a “critical inflection point” for silver, and if sustained should reignite sidelined retail interest, MKS PAMP’s Shiels said. Meanwhile, a potential renewal in demand for platinum-backed exchange-traded funds could produce a speculative rally, given sticky and elevated lease rates indicate the market is tightening, she added.
Platinum ETF holdings are showing signs of picking up, and have expanded more than 3% since mid-May, according to data compiled by Bloomberg. Meanwhile inflows into silver-backed ETFs have continued to grow since February, with holdings up by nearly 8%.
Meanwhile, palladium also benefited from growing positive sentiment across the precious metals complex, climbing as much as 1.2% on Friday. Gold rose 0.5% to $3,368.79 an ounce as of 11:40 a.m. in Singapore, putting it on track for a weekly gain of around 2.4%. The Bloomberg Dollar Spot Index was little changed.
