Price over $ 20: the new silver rush
The uncertainty about the outcome of the corona crisis and the flood of billions of euros from the central banks are driving investors into safe havens. In addition to gold, silver is increasingly in demand. The precious metal climbed to a four-year high today.
If silver is indeed the "little man’s gold", then the silver rush has only just begun. Precious metal traders report the recent rapid increase in demand for silver bars, while interest in gold has leveled off at a normal level. "Our bars from one gram to 100 grams are more in demand than ever," says Alexander Filkorn, managing director of the Ophira trading company. Customers bought silver packages as a hedging instrument. With small denominations of one to ten grams "they could deal better with a currency crash than with small gold bars," he knows. They could use it to shop anywhere, "and the dealer, baker, butcher or farmer doesn’t have to go out" to exchange the metal.
Risen faster than gold
In fact, silver has outperformed gold over the past few weeks and months. While the yellow precious metal has gained a good 24 percent since the low point of the Corona crash, silver gained almost 70 percent. Since the beginning of June, the silver price has risen by around twelve percent. Gold has only risen by five percent over the same period.
Further price information on gold in US dollars
On Tuesday, the silver price jumped above the $ 20 mark for the first time in almost four years. At its peak, a troy ounce (31.1 grams) of the precious metal cost 20.43 US dollars in the morning. This is the highest level since September 2016.
Further price information on silver in US dollars
Gold-silver ratio fallen
Accordingly, the gold-silver ratio, which compares the two prices, has fallen noticeably. But it is still well above its long-term average. Experts therefore see scope for a further increase in the price of silver.
Gold and silver have been benefiting for some time from the great uncertainty about the progress of the corona crisis, among other things. Precious metals are considered to be safe investment havens, which are valued as a stable investment in uncertain times. Because of the trillions that central banks and governments are throwing on the market to combat the consequences of the corona, more and more people fear rising national debt and high inflation in the medium to long term. Like gold, silver is used to protect against inflation.
Bet on economic recovery
However, the precious metal also depends on the economic development, since – unlike gold – it is used extensively in industry. The slight economic recovery in recent weeks is likely to have given the silver price additional support recently. In addition, the persistently low interest rates benefit interest-free investments such as silver and gold.
Further price information on silver in euros
Experts at Commerzbank have long seen large investors making massive investments in silver ETFs. The trigger was the record high gold / silver ratio in favor of gold. Since then, thousands of tons have flowed into the silver ETFs.
Expert: Silver price could double in 2020
Some raw material experts believe that the "little man’s gold" will continue to jump in price. Financial blogger Kris Knutson, for example, predicts on The Motley Fool website that the price could double this year. Because silver has been used as a means of payment for thousands of years. "Investors will try to preserve their assets through stores of value such as precious metals. In addition, silver is cheaper than gold.
In terms of charts, things also look good for the white precious metal. HSBC writes in its daily newsletter that it has bottomed out in recent years after rising above the $ 19 mark. She puts the target price at $ 28.