Silver Defies Gold's Decline as Dual Demand Drives Market
Silver continued its upward trend on Thursday, defying gold's decline after profit-taking. The two precious metals are experiencing different stories in the market.
Gold's rally hit a 4% peak before traders took profits as yields recovered and prices reached the 200-day moving average. Silver, however, broke through its own resistance level, surpassing Wednesday's high at $67.02 to reach $68.99 before pulling back.
Silver stands out due to its dual sources of demand, making it distinct from gold. It is driven by both industrial consumption and trading with precious metals when yields and the dollar move in its favor. Gold, on the other hand, only benefits from the latter.
The silver market faces a significant supply deficit, projected at 46.3 million ounces for 2026. This shortage stems from mining not keeping pace with increased prices, as most silver is extracted as a byproduct of copper, lead, and zinc production. Recycling brings some metal back into the market but does not fill the gap.