The price of silver soared in May, jumping more than 19 percent on safe haven demand as well as increased expectations of a swift economic recovery, given its many industrial applications. Not only was this silver’s best month since 2011, but it also marked an impressive turnaround for the white metal that just recently plunged to a more-than 10-year low. From March 18 through June 1 of this year, silver soared more than 52 percent, erasing all of its losses due to the coronavirus pandemic.
The question now is whether the rally can continue along with economic improvement, or whether it’s too late to start participating. I believe there’s still a lot of runway left, especially when you consider the growing need for silver in emerging technologies such as 5G wireless networks and photovoltaic (PV) cells, the building block of solar panels.
Silver ETF Holdings at an All-Time High
Silver started June in overbought territory based on the 14-day relative strength index (RSI), but that didn’t seem to deter investors. Global ETFs backed by physical silver have added some 142 million ounces since the metal dipped below $12 an ounce in mid-March. Holdings now stand at an incredible 746 million ounces, the most on record, according to Bloomberg data.
Interestingly, if you look at the chart below, silver ETF holdings appear to have begun tracking the price not of silver, but of gold.