Safe-haven demand after the Brexit vote, a perspective that the US Federal Reserve will not raise rates this year, the outlook for further stimulus from the Bank of England and ECB are the main reasons behind the precious metals rally.

After UK voted to leave the EU, the price of silver in dollars has jumped 16% to its highest level in two years, out preforming gold, another popular safe-haven at times of unstability. In pounds, silver price has risen by a third.

Silver is the best performing major commodity so far this year. Silver’s relative rise against gold post-Brexit has not come as surprise to analysts. Historically silver has outperformed gold in bull markets and underperformed in bear markets. Silver is a much smaller and less liquid market than gold. Relative difference in price attracts more retail investors. In 1792, the silver/gold price ratio was fixed by law in the United States at 15:1, however today it is around 67:1. After Brexit many investors pulled their money from the stock marekts and banks, seeking safe-haven assets as gold and silver.

There's a fundamental notion driving silver prices in 2016: supply and demand. The U.S. Mint has a lot of ongoing physical demand. In the first five months of this year, U.S. silver demand is up by 40% over the same period in 2015. The Mint has had to increase its weekly allocation of silver American Eagle coins. In May, there were 4,5 million American Silver Eagles sold. A year earlier, roughly 2 million American Silver Eagle coins were sold. That's a huge increase year over year, and May 2016 was the best month for American Silver Eagle coins in 30-year period.

Demand on physical silver is rising each year. One of the reasons is also that silver is widely used in electronics and battery manufacturing. For example, demand for silver in solar photovoltaic applications rose 23 % last year. Each photovoltaic cell solar panel is built with 20 grams of silver. According to the Silver Institute, 70 million ounces of silver could be used in the solar industry this year.