LIVE MARKETS- High ho, silver!

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HIGH HO, SILVER!

Silver XAG= has topped $60 an ounce today, bringing its gains for the year to 111% as it benefits from what would appear to be the best of all worlds. A possible Fed rate cut, jitters over possible fragility in the stock market and a boom in demand for metals that are key to the AI datacentre build-out and general electrification. It's also been included in the U.S. critical minerals list. The price has been supported for some time by persistently low supplies and dwindling global inventories

Given its volatility and industrial component, silver isn't a traditional safe haven, like gold, but it has benefited from those flows as well, particularly given how cheap it is relative to classic bullion.

This move above $60 has been whittling away at that relative cheapness. The gold/silver ratio, which measures how many ounces of silver it takes to buy one ounce of gold, has shrunk to its smallest since mid-2021. At around 69, it's come in sharply from April's five-year high of 102. This number hasn't been below 70 for any length of time in well over a decade.

With both excitement about the AI boom and fears about an AI bubble helping silver's case, there could be more room for that ratio to keep compressing into 2026.

(Amanda Cooper)

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