Silver prices surged over $21/oz Monday morning, its highest since August 2014, extending gains on safe-haven demand and a strong gold price, but also finding support from recent strength in industrial metals.
Silver prices eased to around $20.50/oz by early afternoon, but with gold trading around $1,350/oz, it puts the silver-gold ratio below 66, also the lowest since August 2014.
While gold has surged 10% since the beginning of June on safe-haven demand and increased volatility in the past 10 days following the UK's vote to leave the EU, silver has gained 28% since June 1.
At less than $14 at the turn of the year, silver is up 45% in 2016 to-date. Gold is up just over 25%.
Along with gold, silver has benefited from investor demand this year, with bullish positions on US commodity exchange COMEX up to record highs in recent weeks.
According to Commitment of Traders data Monday, silver net long contracts recorded a new high of 77,662 contracts in the week to June 28, having extended by over 50% in the last three weeks.
Silver-backed exchange-traded funds saw inflows of 137.3 mt in June, Commerzbank reported Monday, "close to a record level."
"The current environment is conducive for silver to do well -- risk sentiment is upbeat for now, while gold is also doing well given the medium/long-term macro picture," UBS said Monday.
Yet with over half of silver's demand coming from the industrial sector, the metal has also been profiting by recent strength seen in base metals.
The London Metal Exchange base metal index climbed to eight-week highs last week, copper above $4,900/mt Monday for the first time since the beginning of May.
Three-month aluminum is up nearly 8% since the start of June, last bid at $1,662/mt 1430 GMT basis LMEselect, while nickel has jumped over 20% since June 1 to breach $10,000/mt Monday, its highest since November.
In its 2016 silver report in June, Metals Focus forecast a 2% increase in industrial demand in 2016 to a five-year high of 470 mt.
The London Bullion Metal Association silver price settled at $20.36/oz Monday afternoon, up $1.1 2on the previous session.
The LBMA gold price settled at $1,350.75/oz Monday afternoon, up $10.75.
