Both precious metals namely silver and gold are benefited due to worries sparked in the market post-U.K.’s decision to exit the European Union or called as Brexit. Buyers feared of an economic slump are investing in precious metals and is causing price rising.
Safe heaven as it is termed by the investors. Though both the metals are almost equally shining in the global commodity market silver prices are skyrocketing. Futures prices in the commodity/stock market are on the rise and have seen an 8.3% weekly gain—this is the metal’s best weekly rise in the last 15 months and hit 21 months high. Silver roughly rose by 20% during the second quarter and is up nearly 40% so far this year 2016.
Post Brexit trading has been very jerky, though gold held on the prices and moving up steadily silver has seen a very sharp uptrend. It has to be noted that silver has far more industrial uses than gold and the investors may opt for the wait and watch policy for a downtrend and uptrend in the market to cash on the opportunity cost, but the industry cannot. This is the precise reason why silver prices see a big rally in the market. Hence when the base metal like copper fluctuates silver also gets benefit out of it. Analysts say the climb is likely to continue through until the end of the year 2016, but some don’t expect the second-half rally to be as high as the gains seen in the last six months of the year.
Both the precious metals are having a strong support of investors over the weak global economic situation. This can likely affect the job market and hence the trend of people to invest in safe heaven will increase. It is also seen that the electronic industry across the globe is coming forward to make future contracts with silver producers. This is happening for the first time in the history of the silver trading. Also, the silver use in the industry is widening.
It is also speculated that the Chinese economy will be entering the red zone soon, it has shown a sharp decline in the recent past and investors across are playing safe. Economists feel that silver has further upside in the near term because the economic fear factor could play out a little further. But considering the extreme bullishness in the market, a slight reversal could be possible for a short time, but all in all this grey metal looks to continue to shine for quite some time in the near future.