Supply concerns drive Silver prices higher – Commerzbank
|Even more than the Gold market, the real momentum continues to be seen in other precious metals markets, most recently, particularly in Silver, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen reports.
Silver remains priced cheaper than Gold
"After Silver prices surged to a new record high of just over $53 per ounce — a gain of up to 120% since the beginning of the year — a correction began early this morning. The sharp price increase over the past few days has also been driven by supply concerns, as seen in other metal markets."
"Reports indicate that physical metal demand from India has recently picked up significantly, fueling fears of supply bottlenecks, particularly in the London market. For example, lease rates (the cost of borrowing Silver), which have made an unprecedented jump, point to liquidity issues in that market. Meanwhile, declining inventories at COMEX since the beginning of the month may also indicate outflows toward London."
"However, the correction in prices this morning shows that the market had overheated. If the Gold price rally continues, however, Silver prices are likely to remain well-supported. Investors seeking more affordable alternatives due to the high price of Gold will continue to turn their attention to Silver, which, despite its rally, remains priced cheaper than Gold."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.