By Mark Decambre
Silver futures traded sharply higher Monday, suggesting growing demand for gold’s sister metal, which is in position to score its best settlement in two years.
September silver SIU6, +0.90% was up 23 cents, or 1.2%, at $20.58 an ounce, after gaining 0.8% Friday and logging a 9.3% monthly advance. Silver’s current level puts it on pace to reach its highest close for a most-active contract since July 2014, according to FactSet data.
“Silver has come back into relative value [with gold] over the last 30 years,” said Ross Norman, chief executive of London-based metals broker London-based Sharps Pixley Ltd.
The gold to silver ratio stands at about 1 to 65, Norman said, with a single ounce of gold worth about 65 ounces of silver at current trading prices.
December gold GCZ6, -0.19% was trading $2.60, or 0.2%, lower at $1,355 an ounce Monday. Gold has enjoyed a healthy bounce as the Federal Reserve’s go-slow approach to hiking interest rates has supported precious metals, which don’t bear a yield.
Julian Phillips, founder of and contributor to GoldForecaster.com, said lower liquidity and volumes in silver can account for some of that metal’s bounce, since thinner volumes can result in sharper moves.