What’s up with surging silver prices?

This BBC podcast is supported by ads outside the UK. Want to know how to become the richest person in the world? Start with the latest episode of our podcast, Good Bad Billionaire. We're telling the story of how Elon Musk massed half a trillion dollars from his troubled childhood in South Africa to buying Twitter and launching rockets into space. With all the boardroom dramas along the way. Find out how he did it on Good Bad Billionaire. Listen wherever you get your BBC podcast. You can't keep this heavy metal down. Silver is hitting record highs. It's world business expressed from the BBC World Service. Omliana Burn. The boss of South Korea's biggest online retailer steps down over the country's biggest data breach and what we can expect from the US Fed later. Precious metals like gold continue to beat market expectations. And now it's silver's moment in the sun. It's hit a record high, more than 60 dollars in ounce. That's up more than 100% since the start of the year. Needless to say, it's been a busy week on the metal's desk. So I called up a commodity. And now it's gold. I called up a commodities trader, Oli Hansen, from Saxo bank in Denmark to take us through what's really driving this rally. Silver has been living a double life because at one hand it's industrial metal, but also it's an investment metal. The higher gold prices early this year helped trigger some demand for not only silver, but also platinum because they were relatively cheap compared to gold. Since then, it has just continued that we are seeing a world where there's a lot of uncertainty out there. There's worries about debt. We see this de-globalization. We are in the process of. We got inflation, which is likely to remain at a sticky high level. And that is attracting investment demand into silver. But then we have the whole industrial side of things as well. Silver is part of the new technologies. It's anything from electrical vehicles to solar panels to AI to data centers. And Oli, when did you realize this bar was heading for a record high? Well, the market's been focusing first of all on the fact that gold hit a record high. Our succession of record highs and that just raised the question, well, could that happen to silver as well? And then suddenly back in August things started to revolve. We had a clear path towards lower interest rates in the U.S. We also had some concerns about the Federal Reserve's independence net drove for a new demand for gold and not least silver. And then when that tightness done to emerge that really gave it some rocket fuel to the rally. And we're seeing that right now where we suddenly above $60 and where the question is really whether we can go even higher. And if I may add from the industrial perspective, it's important to note that the silver content of the total production is relatively small. So that means the price of silver is inelastic, meaning that running out of silver is simply not an option. You mentioned shortages and there's also reports about stockpiling. So our company is physically trying to get their hands on silver before the price goes up. We've also only looked that way. Around 58% of total silver demand is industrial demand. That gets taken out the market not to return unless there is some recycling at a later stage. But the 58% is all physical. And if there is concerns that we in the next six to 12 months could see some some problems on the supply side, then they will rather buy today and not having to worry about that at a later stage. Recently as well, we saw a very, very strong demand from Indian consumers. And that's on the durable side as a substitution to very expensive gold prices at the time. So that helped tighten up the market, leaving the London market extremely tights in the physical market. London is the main center for physical trading of silver. And that market was almost down to its last bars. So I had to scramble to seek supplies elsewhere. That has started to sort itself out. But the London market in terms of cash in terms of physical bars is still very tight. Ollie Hansen from Saxo Bank in Denmark. Now the US Central Bank, the Federal Reserve, is very much in focus today. Lots of expectations it will cut interest rates for the third time running joining me now. Ross Mold, Investment Director at AJ Bell. Ross, what are the markets saying to you? Hello, Liana. They're saying that there's a 90% chance of an interest rate cut today of one quarter point. That's down to three and a half percent. Perhaps of more interest will be if Chair Jay Powell gives any hints as to what's coming next year. When markets are currently pressing in two more reductions to three percent by next Christmas. Now this is a very deeply divided topic at the fair, doesn't it? It is. On one hand, you got inflation. It's above target. In economy, it still seems to be growing quite healthily. And financial markets that feel certainly quite excited if not speculative and bubbly. All arguments not to cut. But on the other hand, unemployment is up from the lows. Consumer confidence is through the floor. And from President Trump and Secretary of State Secretary of Percent's point of view. They'd love lower interest rates, not just to help the economy, if it needs it. But also to help them manage the interest bill on the ever growing federal debt. And the big risk isn't as inflation price rises. That'll be a result of lower interest rates. Certainly a risk. And that's why some investors have been down to diversify away from dollar assets this year. Other currencies have done better. And even away from the old concrete US stock market, which is not done as well as other markets this year. Which is quite unusual. But some investors have been nervous of either political pressure or other pressure persuading the Fed to take more chances with inflation than perhaps they'd like. But we do, we will get a sense of where they will go in 2026. We will and chip from the question and answer session with Chair Powell and also with the so-called dot plot where the other federal reserve committee members give a bit of a view. And I think Mr Powell himself probably is quite wary of being seen as soft on inflation if he ahead of when he steps down next year. All right, Ross Mold, Investment Director at AJ Bell. Thank you so much. And the boss of South Korea's biggest online retailer, Coupang, has resigned, taking responsibility for what was one of the country's biggest data breaches. Park Day-June is the highest profile casualty of a crisis which sparked a massive public backlash under government investigation. BBC Korean journalist David O told me when the company found out about the leak. This case of a coupon because of the sheer amount of important information is now reaching nearly 34 million customer accounts. Initially the case was forced to report it in November. It was known that only 45,000 personal accounts has been hacked. It found out that almost 34 million customer users account has been exposed by the data leaking, including the personal information on numbers and the home addresses. So this is a serious case. So what did the company say? What have the government said? Investigation is still ongoing. The South Korean parliament is questioning the Coupang's CEO and every person is about to why this happened and how this happened. Yeah, one interesting thing about this story as well as that South Korea, when it comes to internet security, it's quite good, isn't it? About that. So this is very much how to step what normally goes on in the country. Yeah, almost the 2/3 of the South Koreans have affected by this Coupang. So that means it shows that how openly South Koreans are using this coupon. It has become a daily routine like every household purchasing groceries and the every diary and almost every stuff from the Coupang deliveries. It's very shocking on one side, but it's also shocking that we have no alternative in South Korea to replace at the moment. I would assume so, and it's a lot of data. It's not a very personal data, understanding people's habits. Do we even know what could be done with that? So far, there has been no report compound about the leaked data used in other cases. But this is still an early case, so we have to wait and see. The International Monetary Fund has weighed in on China's booming exports, saying a weaker Yuan is now fueling growing global trade imbalances. It's saying that Beijing should boost consumer spending and allow more flexibility with its currency. Warning, the China is simply too big to rely on export-led growth without stoking tensions. China's trade surplus has already topped $1 trillion this year. Meanwhile, Amazon says it's going to double its investment in India by 2030, focusing on artificial intelligence and e-commerce. This comes after Microsoft and Google also laid out multi-billion dollar spending plans for AI in India. So what's the sudden interaction? The BBC's Archana Shokla is on Mumbai. This is where there is a large consumer base. This is where people are spending money. It's a large middle class. This is also a place where the digital market is expanding very fast. About a billion people online. We have 745 million smartphone users here in India. And this is a market that no big tech company now wants to miss out on. US China tensions are driving some of these companies to look to diversify the supply chains, look to tap into India's talent pool, and somewhere reduce reliance on China. So India is stepping up to show that they can be the next alternative to China. Archana Shokla there and that's it from World Business Express with Neeliana Bern. Thanks so much for listening. Start with the latest episode of our podcast Good Bad Billionaire. We're telling the story of how Elon Musk masked half a trillion dollars. From his troubled childhood in South Africa to buying Twitter and launching rockets into space. Listen wherever you get your BBC podcasts. [Music]