As the price of gold shot up today, correcting losses experienced in the first week of August, and silver followed suit. The precious metal shot up 50 cents an ounce on Aug. 12, and settled out at $21.40. The commodity was spurred by an increasingly sunny economic outlook in China. The country released trade numbers at the end of the week, and the data was exceptionally positive.
Ole Hansen, head of commodity strategy at Saxo Bank, singled out China’s better-than-expected importation of raw materials for driving up the price of silver. Price Futures Group senior market strategist Phil Flynn said China is on a “gold and silver buying binge,” and that the high demand for the physical commodity would continue to prop up high prices for the metals.
China reported they have had an increased demand for jewelry, reporting a 44-percent year-over-year hike. Silver is also becoming increasingly popular in China as a means of old-fashioned wealth protection, as conservative investors hedge their bets on China’s economic surge continuing unabated.
Domestic recovery has also aided in the surging price of silver. When concerns that the federal stimulus would be "tapered off" increased mid-summer, the price dropped. But now that those fears have been largely assauged, silver has recovered Stateside.
Silver ETFs responded in kind to the price jump. ProShares Ultra Silver (AGQ) shot up 8.69 percent to hit $19.96 a share. Global Silver Miners ($SIL) is up 5.84 percent to hit $14.49 a share. ETFS Physical Silver Shares ($SIVR) is up 4.4 percent to hit $21.23 a share. And the popular iShares Silver Trust ($SLV) is up 4.35 percent to hit $20.62 a share.
