Silvers Turn to Shine

August 15, 2013 at 08:11

truthing

Silver futures hit a two-month high, propped up by hopes for stronger demand after a recent slate of mostly upbeat global economic data.

Silver futures have surged 12% in five trading days as brighter economic reports pushed investors who had bet on lower prices to close out those bets. About 40% of silver consumption comes from products such as circuit boards and solar panels. As a result, silver prices can track economic-growth expectations.

“The key trigger was last week when we had the export sales data from China,” said Mike McGlone, a director of research with ETF Securities. The data, which showed strong gains in imports and exports, showed “overall economic prospects for China improved,” Mr. McGlone said.

Data showed the euro-zone economy returned to growth during the second quarter of the year, following a year and a half of contraction. The European Union’s official statistics agency said the combined gross domestic product of the currency area’s 17 members was 0.3% higher than the prior three-month period. Economists had expected an expansion of 0.2%.