Back to top

Why Are Silver Prices Climbing?

Read MoreHide Full Article

The price of silver (SLV - Free Report) gained nearly 6% on Friday as investors flock to the precious metal while bond yields hit new lows. With a closing price above $19.45, silver will have produced its largest three-day gain since October 2015.

The bid yield on the 10-year Treasury note fell to 1.385% in early trading Thursday, which broke the previous low of 1.389% set in July 2012. Although yields did not remain at record lows for long, their levels have encouraged investors to switch to gold and silver.

Simply put, with yields this low, there is a lot less incentive for investors to purchase treasury bonds. Instead, gold and silver become desirable. Although these metals have 0% rates, they have the possibility of price appreciation and prices tend to rise as yields fall.

Throw this on top of the Brexit, which has sparked mass uncertainty throughout the global markets, and it was the perfect formula for silver to make major gains this week. The silver miners ETF (SIL - Free Report) also gained over 5% on Friday and is up over 10% on the week.

The recent action surrounding precious metals has reawakened the beast, but gold and silver still have a long way to go to return to the levels we were seeing five years ago. Check out the chart:

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 DaysClick to get this free report >>


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


ISHARS-SLVR TR (SLV) - free report >>

GLBL-X SILVER (SIL) - free report >>