(Bloomberg) -- Spot silver surpassed $30 an ounce to hit the highest level in more than a decade.

The precious metal closed 6.5% higher at $31.49 an ounce Friday, the highest since February 2013. It has soared 32% this year, outpacing gold and making it one of the year’s best-performing major commodities.

Silver’s rally comes amid surging investor interest, an increasingly supportive macroeconomic backdrop and a projected fourth annual market deficit. The price rally accelerated Friday, helped by spillover sentiment in the broader metals markets.

Copper and Gold Close In on Records as Metals Mayhem Continues

“This week was kind of the recreation of the meme stock,” Phil Streible, chief market strategist at Blue Line Futures, said Friday in a phone interview. “Those speculators naturally look for different areas to exploit. And silver is usually the one that they favor.”

Silver was a target market of Reddit retail traders in 2021 amid a buying stampede in GameStop Corp. and other small-cap stocks that captivated the financial world.

The precious metal’s break through the $30 level may trigger substantial buying activity by exchange-traded funds — increasing the risk of a silver squeeze, according to TD Securities senior commodity strategist Daniel Ghali.

Investors remain net sellers of physically backed silver ETFs, with holdings down 1.7% as of Thursday, according to data compiled by Bloomberg. In the week ending May 14, money managers boosted their bullish wagers on Comex silver futures to the highest in more than two years. Gross shorts held by these investors accounted for 11% of total open interest as of May 14.

Although silver’s rally has outpaced gold’s, it is still relatively cheap.

The two precious metals move largely in tandem as both offer similar macro- and currency-hedging properties. With gold hitting a record on central bank buying, retail interest in China and a resurgence in bets that lower US interest rates are on the way, silver has gone along for the ride. Although there’s been scant interest from investors in silver-backed exchange-traded funds, physical sales have picked up, including at Singapore-based dealer Silver Bullion Pte.

Silver has a dual character, valued both for its uses as a financial asset and an industrial input, including for clean-energy technologies. The metal is a key ingredient in solar panels, and with robust growth in that industry, usage of the metal is expected to reach a record this year, according to the Silver Institute. Against that backdrop, the market is headed for a fourth year in deficit, with this year’s shortage seen as the second biggest on record.

(Updates prices in the second paragraph.)

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