Silver price hits multi-year highs as it works to get out of gold’s shadow

Silver prices hit a seven-year high of $US29/oz ($40.32/oz) this week, as investors rediscover its safe haven status as a hedge against the current economic storm (reports Stockhead).
14th August 2020
Resources Rising Stars

Silver prices hit a seven-year high of $US29/oz ($40.32/oz) this week, as investors rediscover its safe haven status as a hedge against the current economic storm (reports Stockhead).

The last time silver reached these levels was back in February 2013.

Demand for physical silver is running hot as latest figures from the Perth Mint show.

The bullion seller shipped 1.56 million ounces of the precious metal to customers in July, similar to June’s sales of 1.57 million ounces, but up from around 1 million ounces in May.

“The extraordinary investor appetite for silver coins has been reflected in record sales of our iconic Australian Kangaroo 1-ounce silver bullion coin, with more than 10.7 million sold in the past financial year,” the Perth Mint said in its Bullion Blog.

Last year’s sales volume represented roughly one-third of the 35 million Australian Kangaroo coins sold since the bullion product was launched in 2015.

The list of price drivers for silver keeps getting longer and runs from ongoing China-US tensions, US dollar currency weakness and worrying economic news from the US, while the COVID-19 pandemic is a relatively new bullish factor for silver.

Perth Mint’s manager for listed products and investment research, Jordan Eliseo, said investors were attracted to silver for several reasons.

“The first of those is momentum, with the price almost doubling from the lows seen in mid-to-late March. The second reason is that silver is historically cheap relative to gold,” he said.

Analysts point to the current gold to silver ratio of 70:1, meaning 1 ounce of gold can buy 70 ounces of silver, as an indication of the market’s direction.

At silver’s price peak of $US46.50/oz in March 2011, it took 35 silver ounces to buy one ounce of gold, a ratio of only 35:1.

Read more at https://stockhead.com.au/resources/silver-price-hits-multi-year-highs-as-it-works-to-get-out-of-golds-shadow/

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