New York: Holdings in exchange-traded funds backed by silver swelled to a record as investors sought a haven from global economic and political risk.

Assets expanded 72.6 metric tonnes to 20,227.2 tonnes as of June 15 and have risen 7.3 per cent this year, data compiled by Bloomberg show. Prices have advanced 29 per cent in 2016, outperforming gold, as investors scale back expectations for increases in US interest rates, benefiting precious metals because they don’t offer yields or dividends.

Federal Reserve Chair Janet Yellen signalled Wednesday that secular forces may keep borrowing costs lower for longer, which helped push gold to the highest level since 2014. Silver joined the rally, adding 2 per cent. Investor anxiety over a British vote June 23 on whether to leave the European Union is also bolstering prices.

“From a flight to quality aspect, gold and silver have been favoured very much,” Bob Takai, chief executive officer and president of Sumitomo Corp. Global Research Co., said by phone from Tokyo. “It’s very natural for investors to run for the safe haven which is gold and silver.”

Investors have added 421.6 tons of gold to exchange-traded funds in 2016, the most for any year since 2009, after reducing holdings for three straight years, according to data compiled by Bloomberg. Silver assets have risen 1,370 tons this year, the most since 2012.

Great value opportunity

“The case for silver will just get stronger and stronger because silver was essentially forgotten by much of the investment community for a long time, thereby creating a great value opportunity both in absolute terms and relative to gold,” Gregor Gregersen, chief executive officer and founder of Singapore-based Silver Bullion Pte., said in an email before the data were released.

An ounce of gold bought 73.3 ounces of silver on Thursday from a high of 83.8 ounces at the end of February, which was a level last seen during the 2008 financial crisis.

Silver looks ready to outperform gold now with the ratio moving lower in a consistent fashion, signalling a genuine bull market condition for both metals, according to Ned Naylor-Leyland, manager of Old Mutual’s Gold and Silver Fund in London.