Silver is shaping as one of the breakout stories of the second half of 2019, as the gold rush becomes a little bit too rich for some.
Silver is now on track to have its best month since December last year, standing at an 8.5 percent gain for the month so far — with silver for July delivery finishing at $US16.55 ($A23.72) overnight.
The secondary precious metal has largely been ignored by investors for the majority of 2019, but according to analysis from the Wall Street Journal, there are two factors contributing the the renewed interest in silver:
- The gold price expanding too quickly
- Silver’s use as an industrial metal
“There was a disconnect between gold and silver prices for a while,” a consultant at broker-dealer INTL FCStone, Edward Meir, was quoted as saying. Lately, however, “there’s been a relative value rotation into silver.”
Prices of silver, which is a component of semiconductors, have also received a tailwind from signs of improving demand for the chips, Mr. Meir said.
Meanwhile, gold has risen 11.3 percent for the year to date which has led some investors to look for a cheaper alternative.
Prices for silver — and other precious metals — have also enjoyed a boost from a spate of uneven global economic data that has bolstered the case for more central-bank easing.
On Tuesday, the International Monetary Fund said trade tensions are slowing the global economy more than earlier projections had anticipated.
Real global economic growth will slow to 3.2 percent this year, 0.1 percentage point slower than forecast in April and down from 3.6 percent last year and 3.8 percent in 2017, the fund said in its World Economic Outlook, released Tuesday.
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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