Silver exchange traded funds rose 5% to outperform gold prices Thursday after the European Union cobbled together a deal designed to buy more time to sort out its debt logjam.
Silver ETFs have also received a boost lately from better economic data, as the metal has industrial applications.
ETFs tracking silver prices such as iShares Silver Trust (NYSEArca: SLV), ETFS Physical Silver Shares (NYSEArca: SIVR) and Powershares DB Silver Fund (NYSEArca: DBS) rallied about 5% on Thursday. [Silver ETFs Climb 5% on Waning Sentiment, Fed Talk]
“The industrial component of silver is kicking in and it had a lot of catch up to do to gold,” Charles Nedoss, broker and futures analyst with Olympus Futures, told Dow Jones Newswires.
Europe plans on increasing the bailout fund to $1.4 trillion, or five times its previous size, and Eurozone banks will be recapitalized with as much as $150 billion, according to the report.
The latest debt bailout in Europe has raised fears of inflation and further monetary debasement — powerful fundamental factors that are driving precious metals.
Commerzbank believes silver will average $35 an ounce this quarter and increase to $40 by the end of next year, reports Allen Sykora for Commodity Online.