- Silver prices reach 13 years while the white metal proves $ 36.00.
- The demand for silver as an industrial metal is triggered despite the lower demand for safe shelters.
- The gold/silver relationship collapses, representing a tone of risk aversion.
La Plata (XAG/USD) is experiencing another day of positive profits, which has pushed prices at 36.00, its highest level since February 2012, providing a firm resistance barrier.
Silver benefits from both its attractiveness and safe refuge during times of economic uncertainty and its unique properties, which make it one of the most wanted industrial metals.
Both characteristics have supported higher prices in La Plata, which are registering weekly gains of 9% at the time of writing on Friday.
The industrial attractiveness of La Plata shines, raising prices at maximum 13 years
At the beginning of the week, silver prices benefited from the growing commercial tensions between the US and China and a weaker US dollar, promoting the demand for precious metals. However, the feeling of the market changed on Thursday after a positive call between US president Trump and Chinese president Xi Jinping, which led to the resumption of commercial conversations between the two nations. The change in feeling reduced the attractiveness of silver as a safe refuge, but increased its demand as an industrial metal.
In addition to an improved geopolitical tone, the data of the Gross Domestic Product (GDP) of the Eurozone of the first quarter and the retail sales figures were stronger than expected, helping to raise confidence in European economic perspectives. Meanwhile, better -expected employment figures in the US and Canada further increased optimism around growth prospects in North America.
Meanwhile, the office of the Canadian Prime Minister (PMO) confirmed that Prime Minister Mark Carney held conversations with the Chinese Premier Li Qiang with the aim of strengthening bilateral ties and expanding commercial cooperation.
With Friday’s developments resulting in lower gold prices and higher prices in La Plata, FXSTERET data shows that the gold/silver ratio is 92431, with a fall of 1.67% intradic, representing a tone of risk aversion that supports the industrial demand of silver.
FAQS SILVER
Silver is a highly negotiated precious metal among investors. Historically, it has been used as a value shelter and an exchange means. Although it is less popular than gold, operators can resort to silver to diversify their investment portfolio, for their intrinsic value or as a possible coverage during periods of high inflation. Investors can buy physical silver, in coins or bullion, or negotiate it through vehicles such as the funds quoted in the stock market, which follow their price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can cause the price of silver to shoot due to its safe refuge status, although to a lesser extent than that of gold. As an asset without performance, silver tends to climb with lower interest rates. Its movements also depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (XAG/USD). A strong dollar tends to maintain the price of silver at bay, while a weaker dollar probably drives rising prices. Other factors such as investment demand, mining – silver supply is much more abundant than gold – and recycling rates can also affect prices.
Silver is widely used in the industry, particularly in sectors such as electronics or solar energy, since it has one of the highest electrical conductivities of all metals, surpassing copper and gold. An increase in demand can increase prices, while a decrease tends to reduce them. The dynamics in US economies, China and India can also contribute to price fluctuations: for the US and particularly China, its large industrial sectors use silver in several processes; In India, the demand for consumers for precious metal for jewelry also plays a key role in pricing.
Silver prices tend to follow gold movements. When gold prices go up, silver typically follows the same path, since their status as shelter is similar. The gold/silver ratio, which shows the number of ounces of silver necessary to match the value of an ounce of gold, can help determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that silver is undervalued, or that gold is overvalued. On the contrary, a low ratio could suggest that gold is undervalued in relation to silver.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
