By Rachel Koning Beals
Silver traded at two-year highs Tuesday, maintaining its status as the standout among metals as lingering post-Brexit economic uncertainty underpinned the relative safety of haven investments, including silver and gold.
September silver SIU6, +1.26% gained 17 cents, or 0.8%, to $19.75 an ounce. It earlier pushed above $21 an ounce on an intraday basis for the first time since July 21, 2014.
At least one analyst questioned if silver’s move had come too far, too fast, and was possibly driven by unusual factors, including thin volume surrounding the U.S. Independence Day holiday. U.S. markets were closed Monday.
“The metals may be taking a breather before the next leg, but I remain skeptical, especially on silver,” said Peter Hug, Kitco Metals global trading director, in a blog post. “It appears that the $3 move on silver from the $18.50 level last Thursday to $21.20 over the weekend was likely a large commercial that decided or was forced to cover a short position…”
“Given that global growth remains anemic, I believe it remains premature to justify silver’s ascent relative gold,” Hug added. “I think the [silver-to-gold] ratio is better justified around the 72:1 level, which at current prices, suggests silver should be in the $18.75 range.”
Meanwhile, August gold GCQ6, +0.84% gained $11.20, or 0.8%, to $1,350.10. Gold remains below the $1,362 intraday high scored on June 24; it closed at $1,319 that day.
Gold and silver gained Tuesday even as a broad measure of the dollar’s strength also improved; the dollar and precious metals often move inversely but have snapped that pattern in many of the trading days since the late-June referendum that gave the thumbs-up for the U.K. to pull out of the European Union, a so-called Brexit.