Silver has outperformed its precious metal counterpart, gold, so far this year, after breaking the $27 level for the first time since 2013. Analysts say the record run is set to continue.
Silver has provided returns of around 61 percent during the year so far, compared to gold’s 15 percent.
On Monday, it was trading three percent higher on Comex, at $27.07 per troy ounce, while gold prices stood at $1,952.36 per troy ounce.
Despite the stellar gains this year, the white metal is still far away from its life-time highs of 49.24 dollars registered on March 2011. Gold, on the other hand, is within striking distance of its all-time high of $2,078.
Analysts say that as the world economy is set to bounce back, it will drive up industrial consumption and will lead to an increase in demand for silver, which has many industrial uses.
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“Silver is likely to continue its outperformance,” Manoj Jain, Director / Head of Commodity and Currency Research, Prithvi Finmart, told NDTV. He added that “The dollar value is on the decline as US growth is at an all-time low. Discovery of a Covid-19 vaccine will lead to a rebound in global industrial activity and push silver rates still higher.”
Gold, which is a traditional safe-haven asset at a time of economic uncertainty and a hedge against inflation, is also likely to do well as many central banks are increasing their gold reserves to reduce their dependence on the dollar. However, an increased appetite for riskier assets could limit gold’s advance, Jain said.
His target for silver over a 2-3 years horizon is $49 dollars on Comex. For gold, the expert is projecting $2,500 in the next 2-3 years.
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