Silver prices jump, playing catch-up to gold
Silver prices shot up 4.5 percent Tuesday, playing catch-up to gold.
Silver is both a precious and an industrial metal. Traders can buy it to hedge against a volatile stock market, as they do with gold. But it can also be used to make products like computer chips, meaning prices can rise when traders expect demand from manufacturers to go up.
In March contracts, silver rose $1.616 to $37.14 per ounce. It’s up roughly 10 percent from where it was a year ago.
Sterling Smith, senior market analyst at Country Hedging in St. Paul, Minn., said part of the reason silver is surging is that traders believe it’s undervalued compared to gold. Gold closed at $1,788.40 an ounce, up $13.50 for the day. It’s up about 26 percent compared to a year ago.
Copper rose 3.15 cents to $3.912 per pound, and platinum rose $9.20 to $1,723.50.
Energy contracts fell, partly because investors were pulling back after price gains last week. Oil prices remain close to nine-month highs because of concerns that Iran could cut shipments of crude to Europe and interfere with supplies elsewhere. The European Union and the U.S. are using sanctions against Iran because they fear the country is developing a nuclear weapon.
Benchmark oil fell $2.01 to finish at $106.55 per barrel on the New York Mercantile Exchange. Natural gas prices fell 8.5 cents to end at $2.627 per 1,000 cubic feet. Heating oil fell 6.28 cents to $3.2201 per gallon.
Smith said grains and other agricultural products have been enjoying a “winning streak” for the past week. Those movements are especially important now as farmers decide what to plant this year.
Soybean prices on Monday topped $13 a bushel for the first time in five months. That’s because traders think there will be greater demand for U.S. exports of the protein-rich beans because smaller harvests from South America are expected.
On Tuesday, soybeans for March delivery rose less than 1 percent, to $13.125 per bushel from $13.025. March wheat rose 15.5 cents to finish at $6.6825 per bushel. Corn ended up 8.75 cents to $6.5725 per bushel.
The price of orange juice also rose. Cocoa and sugar fell.
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