Global supply shortage and bets on rising demand have driven silver's second-quarter gains beyond gold, copper and other financial assets. Analysts believe that the price of this precious metal is likely to increase further.

John Caruso, senior market strategist at RJO Futures, said that silver's performance had fallen "considerably" behind that of gold in the past two years, but the market is now "not only accepting silver as a precious metal in its own right, but also accepting its industrial uses".

Deutsche Bank analysts said in a report on Monday that the metal market had performed "overall" well in the second quarter.

Deutsche Bank pointed out that in terms of spot, silver's total return rate during this period was 16.7%, copper's total return rate was 9.6%, both of which set the highest quarterly total return rate in six quarters. Meanwhile, gold's return rate in the second quarter was 4.3%, rising for the third consecutive quarter.

In the second quarter of this year, silver's return rate surpassed that of U.S. stocks, gold and copper.

Caruso said that silver is a very good conductor of electricity, and demand for it in solar panels and semiconductor chips is growing. Last year, the significant growth in demand for solar panels was the main pillar of silver demand, and now the demand for AI chips is further driving silver demand to become a market focus.

Why is silver able to stand out?

Peter Spina, founder and CEO of investment websites GoldSeek.com and SilverSeek.com, said that key players in the silver market are investing, especially Western silver exchange-traded funds (ETFs).

He said, "Investor years of selling has eased the impact of supply shortages," but now, "we see signs that not only is selling over, but also as prices continue to break out, the number of investors is increasing."

Spina said that these circumstances, coupled with tight inventories and a shift in bullish views by silver investors and ETF buyers, could quickly send the silver market back into a tight state.

He said that if gold and silver investment grew "meaningfully," silver prices would reach $40 to $50 later this year, setting a new historical high.

Paul Marino, chief revenue officer at GraniteShares, pointed out that historically, silver outperforms gold in bull markets, and the "risk mindset" of the first half of this year has driven silver's outstanding performance. GraniteShares manages several commodity-focused ETFs, including the GraniteShares Gold Trust BAR.

He said that silver is a key component of electronic products, medical devices and other high-tech applications, and that "as companies specializing in these areas profit, silver is likely to rise." This also means that silver will experience a supply shortage for the fourth consecutive year.

However, Caruso said that silver's outstanding performance relative to gold is more like "catch-up".

He pointed out that the reasons for the volatility of these two precious metals are the same: interest rate policy, geopolitical conflicts and the trend of the U.S. dollar. He said, "We have seen gold really rise in recent years, now I think that, from the perspective of the imbalance of the gold/silver ratio, silver can be said to be catching up."

Currently, the gold/silver ratio shows that about 79 ounces of silver can be exchanged for one ounce of gold. Caruso notes that the average level of this ratio over the past 100 years has been close to 45:1.

In late March, a few months before the silver price reached a new all-time high, Spina said that from a currency perspective at the time, the close to 90 gold/silver ratio was a "great buy point" for silver.

Regarding the issue of why copper's performance lagged behind that of silver, Caruso said that copper's decline was more related to the economic outlook of some Asian countries, but he added,"Ultimately, we expect copper to continue to perform well by the end of this year and in 2025."

He also pointed out that the Fed's interest rate cut will provide reasons for the rise in silver prices, while the uncertainty of the upcoming US presidential election and broader geopolitical landscape may also support the silver price.