“Silver is a key component needed for data centres and AI, and the market is waking up to that demand,” said Kazuhiro Sasaki, head of research at Phillip Securities Japan Ltd. Many investors are shifting funds from chips and other AI-related stocks to metals like silver, which look more undervalued, he said.
Silver hit a record of US$84 an ounce on Monday and was volatile, subsequently falling as much as 5.1% below the previous session’s close before rising once more. The precious metal is headed for its sixth day of gains on a weaker dollar and escalating geopolitical tensions, as well as speculative trading and a structural imbalance between supply and demand.
“Silver could quite feasibly be trading in the US$90-US$100 range next year whilst supply shortfalls remain an overarching theme for the precious metals market,” said Tim Waterer, chief market analyst at KCM Trade. “The supply-demand market dynamics remain in favour of silver, which is illustrated by the rampant rise of the precious metal.”
Shares of mining companies from China to Australia have been surging as prices of precious metals, including gold and platinum, hit records. Australian precious metals maker Genesis Minerals Ltd has risen 199% this year while Chinese gold miner Zijin Mining Group Co has risen 152% in Hong Kong. Indonesia’s Aneka Tambang Tbk, which mines gold and silver, has seen a 122% advance this year.
See also: Copper rebounds from two-day slump as metals selloff eases
Other metal makers rose today as well. Chinese aluminium and copper miners extended a rally after the nation’s state economic planner encouraged mergers and acquisitions in these sectors, a move that Morgan Stanley analysts said could benefit industry leaders. Shares of Jiangxi Copper Co rose as much as 13% in Hong Kong to a record, while those of CMOC Group Ltd also jumped by as much as 6% to a record.
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